Although the guarantee thresholds have been reduced, this reduction at the same time makes it possible to increase the premium for the northern countries.

Madam President, the Commission proposal we are examining this evening focuses on issues relating to the fixing of premiums and guarantee thresholds for leaf tobacco.

This proposal fixes the premiums and guarantee thresholds for the next three years, changes the scope of the Tobacco Fund and slightly simplifies the common organisation of the market.

A short while ago, therefore, following Mrs González' report, the European Parliament approved the urgent establishment of guarantee thresholds at Member State level and the Commission was asked to present these proposals as a matter of urgency.

Amendments Nos 18 and 19 are not acceptable to the Commission because the suggested guarantee thresholds and the way in which they are broken down bears no relation to current production demands and efforts to encourage varieties for which there is greater demand.

Madam President, ladies and gentlemen, the Commission is taking the opportunity provided by the reform of premiums and guarantee thresholds for the period 2002-2004, to make a change that spells disaster for producers and for the social and economic balance of entire regions.

As for the amendments on the guarantee thresholds, the Commission wishes to avoid disrupting the market in all group V varieties, for which market prices are poor and which face competition from cigarettes manufactured in Eastern Europe and the former Soviet Union.

We therefore think that it is more sensible to increase and improve the current system for calculating quotas with increases in line with the total amounts of production aid and not to move towards a system of guarantee thresholds that could penalise all farmers and not just those who exceed their quotas.