Treaty Establishing the European Community

as Amended by Subsequent Treaties

ROME, 25 March 1957

CONTENTS

Part Three. Community Policies

TITLE II. AGRICULTURE

Part Three. Community Policies

TITLE II. AGRICULTURE

Article 38.

1. The common market shall extend to agriculture and trade in agricultural products. 'Agricultural products' means the products of the soil, of stock-farming and of fisheries and products of first-stage processing directly related to these products.
2. Save as otherwise provided in Arts. 39 to 46, the rules laid down for the establishment of the common market shall apply to agricultural products.
3. The products subject to the provisions of Arts. 39 to 46 are listed in Annex II to this Treaty. Within two years of the entry into force of this Treaty, however, the Council shall, acting by a qualified majority on a proposal from the Commission, decide what products are to be added to this list.
4. The operation and development of the common market for agricultural products must be accompanied by the establishment of a common agricultural policy among the Member States.

Article 39.

1. The objectives of the common agricultural policy shall be:
   • (a) to increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilisation of the factors of production, in particular labour;
   • (b) thus to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture;
   • (c) to stabilise markets;
   • (d) to assure the availability of supplies;
   • (e) to ensure that supplies reach consumers at reasonable prices.
2. In working out the common agricultural policy and the special methods for its application, account shall be taken of:
   • (a) the particular nature of agricultural activity, which results from the social structure of agriculture and from structural and natural disparities between the various agricultural regions;
   • (b) the need to effect the appropriate adjustments by degrees;
   • (c) the fact that in the Member States agriculture constitutes a sector closely linked with the economy as a whole.

Article 40.

1. Member States shall develop the common agricultural policy by degrees during the transitional period and shall bring it into force by the end of that period at the latest.
2. In order to attain the objectives set out in Art. 39 a common organisation of agricultural markets shall be established.

   This organisation shall take one of the following forms, depending on the product concerned;

   • (a) common rules on competition;
   • (b) compulsory co-ordination of the various national market organisations;
   • (c) a European market organisation.
3. The common organisation established in accordance with paragraph 2 may include all measures required to attain the objectives set out in Art. 39, in particular regulation of prices, aids for the production and marketing of the various products, storage and carry-over arrangements and common machinery for stabilising imports or exports.

   The common organisation shall be limited to pursuit of the objectives set out in Art. 39 and shall exclude any discrimination between producers or consumers within the Community.

   Any common price policy shall be based on common criteria and uniform methods of calculation.

4. In order to enable the common organisation referred to in paragraph 2 to attain its objectives, one or more agricultural guidance and guarantee funds may be set up.

Article 41. To enable the objectives set out in Art. 39 to be attained, provision may be made within the framework of the common agricultural policy for measures such as:

• (a) an effective co-ordination of efforts in the spheres of vocational training, of research and of the dissemination of agricultural knowledge; this may include joint financing of projects or institutions;
• (b) joint measures to promote consumption of certain products.

Article 42. The provisions of the Chapter relating to rules on competition shall apply to production of and trade in agricultural products only to the extent determined by the Council within the framework of Art. 43 (2) and (3) and in accordance with the procedure laid down therein, account being taken of the objectives set out in Art. 39.

The Council may, in particular, authorise the granting of aid:

• (a) for the protection of enterprises handicapped by structural or natural conditions;
• (b) within the framework of economic development programmes.

Article 43.

1. In order to evolve the broad lines of a common agricultural policy, the Commission shall, immediately this Treaty enters into force, convene a conference of the Member States with a view to making a comparison of their agricultural policies, in particular by producing a statement of their resources and needs.
2. Having taken into account the work of the conference provided for in paragraph 1, after consulting the Economic and Social Committee and within two years of the entry into force of this Treaty, the Commission shall submit proposals for working out and implementing the common agricultural policy, including the replacement of the national organisations by one of the forms of common organisation provided for in Art. 40 (2), and for implementing the measures specified in this Title.

   These proposals shall take account of the interdependence of the agricultural matters mentioned in this Title.

   The Council shall, on a proposal from the Commission and after consulting the European Parliament, acting unanimously during the first two stages and by a qualified majority thereafter, make regulations, issue directives, or take decisions, without prejudice to any recommendations it may also make.

3. The Council may, acting by a qualified majority and in accordance with paragraph 2, replace the national market organisations by the common organisation provided for in Art. 40 (2) if:
   • (a) the common organisation offers Member States which are opposed to this measure and which have an organisation of their own for the production in question equivalent safeguards for the employment and standard of living of the producers concerned, account being taken of the adjustments that will be possible and the specialisation that will be needed with the passage of time;
   • (b) such an organisation ensures conditions for trade within the Community similar to those existing in a national market.
4. If a common organisation for certain raw materials is established before a common organisation exists for the corresponding processed products, such raw materials as are used for processed products intended for export to third countries may be imported from outside the Community.

Article 44.

1. In so far as progressive abolition of customs duties and quantitative restrictions, between Member States may result in prices likely to jeopardise the attainment of the objectives set out in Art. 39, each Member State shall, during the transitional period, be entitled to apply to particular products, in a non-discriminatory manner and in substitution for quotas and to such an extent as shall not impede the expansion of the volume of trade provided for in Art. 45 (2), a system of minimum prices below which imports may be either:
   • temporarily suspended or reduced; or
   • allowed, but subjected to the condition that they are made at a price higher than the minimum price for the product concerned.

   In the latter case the minimum prices shall not include customs duties.

2. Minimum prices shall neither cause a reduction of the trade existing between Member States when this Treaty enters into force nor form an obstacle to progressive expansion of this trade. Minimum prices shall not be applied so as to form an obstacle to the development of a natural preference between Member States.
3. As soon as this Treaty enters into force the Council shall, on a proposal from the Commission, determine objective criteria for the establishment of minimum price systems and for the fixing of such prices.

   These criteria shall in particular take account of the average national production costs in the Member State applying the minimum price, of the position of the various undertakings concerned in relation to such average production costs, and of the need to promote both the progressive improvement of agricultural practice and the adjustments and specialisation needed within the common market.

   The Commission shall further propose a procedure for revising these criteria in order to allow for and speed up technical progress and to approximate prices progressively within the common market.

   These criteria and the procedure for revising them shall be determined by the Council acting unanimously within three years of the entry into force of this Treaty.

4. Until the decision of the Council takes effect, Member States may fix minimum prices on condition that these are communicated before hand to the Commission and to the other Member States so that they may submit their comments.

   Once the Council has taken its decision, Member States shall fix minimum prices on the basis of the criteria determined as above.

   The Council may, acting by a qualified majority on a proposal from the Commission, rectify any decisions taken by Member States which do not conform to the criteria defined above.

5. If it does not prove possible to determine the said objective criteria for certain products by the beginning of the third stage, the Council may, acting by a qualified majority on a proposal from the Commission, vary the minimum prices applied to these products.
6. At the end of the transitional period, a table of minimum prices still in force shall be drawn up. The Council shall, acting on a proposal from the Commission and by a majority of nine votes in accordance with the weighting laid down in the first subparagraph of Art. 148 (2), determine the system to be applied within the framework of the common agricultural policy.

Article 45.

1. Until national market organisations have been replaced by one of the forms of common organisation referred to in Art. 40 (2), trade in products in respect of which certain Member States:
   • have arrangements designed to guarantee national producers a market for their products; and
   • are in need of imports,

   shall be developed by the conclusion of long-term agreements or contracts between importing and exporting Member States.

   These agreements or contracts shall be directed towards the progressive abolition of any discrimination in the application of these arrangements to the various producers within the Community.

   Such agreements or contracts shall be concluded during the first account shall be taken of the principle of reciprocity.

2. As regards quantities, these agreements or contracts shall be based on the average volume of trade between Member States in the products concern ed during the three years before the entry into force of this Treaty and shall provide for an increase in the volume of trade within the limits of existing requirements, account being taken of traditional patterns of trade.

   As regards prices, these agreements or contracts shall enable producers to dispose of the agreed quantities at prices which shall be progressively approximated to those paid to national producers on the domestic market of the purchasing country.

   This approximation shall proceed as steadily as possible and shall be completed by the end of the transitional period at the latest.

   Prices shall be negotiated between the parties concerned within the framework of directives issued by the Commission for the purpose of implementing the two preceding subparagraphs.

   If the first stage is extended, these agreements or contracts shall continue to be carried out in accordance with the conditions applicable at the end of the fourth year after the entry into force of this Treaty, the obligation to increase quantities and to approximate prices being suspended until the transition to the second stage.

   Member States shall avail themselves of any opportunity open to them under their legislation, particularly in respect of import policy, to ensure the conclusion and carrying out of these agreements or contracts.

3. To the extent that Member States require raw materials for the manufac ture of products to be exported outside the Community in competition with products of third countries, the above agreements or contracts shall not form an obstacle to the importation of raw materials for this purpose from third countries. This provision shall not, however, apply if the Council unanimously decides to make provision for payments required to compensate for the higher price paid on goods imported for this purpose on the basis of these agreements or contracts in relation to the delivered price of the same goods purchased on the world market.

Article 46. Where in a Member State a product is subject to a national market organisation or to internal rules having equivalent effect which affect the competitive position of similar production in another Member State, a countervailing charge shall be applied by Member States to imports of this product coming from the Member State where such organisations or rules exist, unless that State applies a countervailing charge on export.

The Commission shall fix the amount of these charges at the level require d to redress the balance; it may also authorise other measures, the conditions and details of which it shall determine.

Article 47. As to the functions to be performed by the Economic and Social Committee in pursuance of this Title, its agricultural section shall hold itself at the disposal of the Commission to prepare, in accordance with the provisions of Arts. 197 and 198, the deliberations of the Committee.