Tag Archives: Agricultural product

Mediterranean package

Mediterranean package

Outline of the Community (European Union) legislation about Mediterranean package

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Agriculture > General framework

Mediterranean package

Document or Iniciative

Council Regulation (EC) No 864/2004 of 29 April 2004 amending Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the Common Agricultural Policy and establishing certain support schemes for farmers, and adapting it by reason of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia to the European Union.

Summary

This Regulation, known as the “Mediterranean package”, supplements the major reform of the Common Agricultural Policy (CAP) of June 2003 with provisions relating to the integration of support for tobacco, hops, olive groves and cotton into the single payment scheme.

The Regulation establishes specific direct aid applicable to these sectors. This aid is granted on condition that farmers meet the cross-compliance requirements laid down by the 2003 reform.

Hops

Direct aid for hops has been decoupled from production since 1 January 2005 (except in countries which applied a transitional period until 31 December 2005). However, in order to deal with specific market situations or regional implications, Member States may retain a certain percentage of coupled aid (corresponding to a maximum of 25 % of their national ceiling *).

The reference amount for the calculation of the aid is EUR 480 per hectare for which aid was granted during the reference period 2000 to 2002.

The Regulation on the common organisation of the market in hops contains rules on marketing, producer groups and trade with third countries.

Cotton

Direct aid for cotton has been decoupled from production since 1 January 2006. However, in order to safeguard production in areas where cotton production would be liable to cease if decoupling were applied in full, Member States may retain a certain percentage of coupled aid (corresponding to a maximum of 35 % of the total amount of aid previously granted for cotton).

This aid is calculated according to the following table:

Maximum area (total)
440 000 hectares
Greece Spain Portugal
National base area

370 000 hectares

70 000 hectares

360 hectares

Aid in euros per eligible hectare

300 000 hectares at EUR 594 per hectare
70 000 hectares at EUR 342.85 per hectare

EUR 1 039 per hectare

EUR 556 per hectare

The “approved inter-branch organisations” in the cotton sector are encouraged to participate in the management of area aid for their members (fixing a scale).

Following the cancellation by the Court of Justice of the European Communities of the 2004 reform in September 2006, the current regulations governing the cotton sector will be replaced in the near future. In response to a very wide-ranging public consultation, stakeholders and the general public submitted contributions with a view to drawing up a new proposal for reform.

Olive oil

Support for the olive oil sector has been decoupled from production since 1 January 2006. However, for the upkeep of olive groves of environmental or social value, area aid (corresponding to a maximum of 40 % of the aid previously granted) is granted for olive groves recorded in the geographical information system *.

Only Spain decided to apply coupled aid for olive groves, amounting to EUR 103.14 million per annum.

Member States may assign no more than 10 % of their national envelope for olive oil to measures to improve quality.

The Regulation on the common organisation of the market in olive oil and table olives regulates the internal market and trade in these products with third countries.

Tobacco

Direct aid for tobacco will be fully decoupled from production from 2010. However, in order to protect local economies and to allow the market price to adjust to the new conditions, Member States may maintain a certain percentage of coupled aid (corresponding to a maximum of 60 % of the aid previously granted) for the four years up to 2010.

During this period, and depending on the choice made by the Member States concerned, the maximum amounts of this aid are as follows:

2006-2009
(EUR million)
Germany

21.287

Spain 70.599
France 48.217
Italy (apart from Puglia) 189.366
Portugal 8.468

A proportion of this production aid (set at 5 % in 2007) is transferred to the Community Tobacco Fund, which finances research and information programmes on the harmful effects of tobacco consumption.

From 2011, half the aid granted annually for tobacco between 2000 and 2002 (estimated at EUR 484 million) will be transferred for restructuring the tobacco-producing regions under rural development programmes financed under the European Agricultural Guidance and Guarantee Fund, EAGGF.

The Regulation on the common organisation of the market in tobacco regulates production orientation and trade with third countries.

Background

The “Mediterranean products” reform is based on the Commission communication to the Council and the European Parliament entitled “Accomplishing a sustainable agricultural model for Europe through the reformed CAP – the tobacco, olive oil, cotton and sugar sectors “. For hops, the reform is based on the report from the Commission to the Council on evolution of the hop sector .

Key terms used in the act
  • National ceiling: maximum amount which each State may allocate to direct aid payments.
  • Geographical information system: a computerised tool organising geographical data and providing a realistic representation of the spatial environment.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 864/2004 1.5.2004 OJ L 161 of 30.4.2004

Resources

See Also

Specific measures in favour of the smaller Aegean islands

Specific measures in favour of the smaller Aegean islands

Outline of the Community (European Union) legislation about Specific measures in favour of the smaller Aegean islands

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > General framework

Specific measures in favour of the smaller Aegean islands

Document or Iniciative

Council Regulation (EC) No 1405/2006 of 18 September 2006 laying down specific measures for agriculture in favour of the smaller Aegean islands and amending Regulation (EC) No 1782/2003 [See amending acts].

Summary

The smaller Aegean islands benefit from specific supply arrangements for certain agricultural products and adapted support measures for local agricultural production. These measures, exemplified by this Regulation, aim at promoting the development of these regions which is hindered by a number of geographical and economic factors.

Specific supply arrangements

Supply of agricultural products (a list of which can be found in Annex I of the treaty) that are essential for human consumption or for the manufacture of other products is based on a specific support policy. In this respect, the authorities designated by Greece establish a forecast supplybalance which quantifies annual needs for the products concerned. This forecast is then approved by the Commission.

The products benefit from supply aid which is fixed according to the additional marketing costs. Implementing the specific supply arrangements takes into account certain factors such as the particular needs of the smaller islands, traditional trade flows, the economic aspect of the aid envisaged and the development of local production.

Products covered by this scheme may only be re-exported under the conditions established by the Committee which assists the Commission. These conditions include the reimbursement of aid received. Moreover, products which are processed in the smaller islands using materials which have benefited from the specific supply arrangements may only be exported to third countries or sent to the Community within the maximum quantities defined by the Commission.

Measures in favour of local agricultural production

Greece presents a support programme which is submitted to the Commission for approval. This programme includes measures to foster agricultural production in the smaller islands. The measures must be coherent and compatible with Community legislation and policies, in particular the Common Agricultural Policy.

The support programme may include:

  • a quantified description of the situation as regards agricultural production;
  • the proposed strategy and expected impact in economic, environmental and social terms;
  • an implementation schedule for the measures and a general summary table describing the resources to be mobilised;
  • a justification of the compatibility and coherence of the various measures in the programme and a definition of the criteria and quantitative indicators used for monitoring and assessment;
  • action taken to ensure that the programme is implemented effectively and appropriately;
  • the competent authority designated to implement the programme and associated organisations.

Support measures

The Commission may authorise additional aid in the form of operating aid in the sectors of production, processing and marketing of the said products to implement the support programme.

Financial provisions

The specific supply arrangements and the measures fostering local agricultural production amount to a maximum of EUR 23.93 million per year. With regard to the specific supply arrangements, the maximum annual amount is EUR 5.47 million.

General provisions

The Commission is assisted by the Management Committee for Direct Payments.

Greece presents to the Commission:

  • by 15 February of each year, funding for the implementation of the programme in the following year;
  • by 30 June of each year, a report on the measures laid down in this Regulation.

The Commission presents a general report on the impact of action carried out pursuant to this Regulation to the European Parliament and the Council by 31 December 2011.

Context

The first unique support framework for agriculture in the Aegean islands was presented in Regulation No 2019/93, which laid down specific supply arrangements and specific aid measures for certain sectors such as potatoes, vines and olive growing. In view of the success of this system, this Regulation aims at maintaining this aid whilst reinforcing partnerships with local authorities and giving them more freedom to manage funding.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1405/2006

3.10.2006

OJ L 265 of 26.9.2006

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 615/2008

29.6.2008

OJ L 168 of 28.6.08

Regulation (EC) No 72/2009

7.2.2009

OJ L 30 of 31.1.09

The subsequent amendments and corrections to Regulation (EEC) No 1405/2006 have been incorporated into the basic text. This consolidated versionis only of documentary value.

Related Acts

Application procedure

Commission Regulation (EC) No 1914/2006 of 20 December 2006 laying down detailed rules for applying Council Regulation (EC) No 1405/2006 laying down specific measures for agriculture in favour of the smaller Aegean islands [Official Journal L 365 of 21.12.2006].

This Regulation contains the application procedure for measures in favour of the smaller Aegean islands. Concerning specific supply arrangements, it describes the function of administrative components such as the aid certificate and the register of operators, gives details of export conditions and explains the procedure for inspection and exports. With regard to measures in favour of local production, the Regulation describes how the amount of aid is determined, how applications are to be submitted and how aid is paid, as well as the principles governing inspections relating to the proper use of aid and sanctions.
See consolidated version

Transmission of information

Commission Regulation (EC) No 792/2009 of 31 August 2009 laying down detailed rules for the Member States’ notification to the Commission of information and documents in implementation of the common organisation of the markets, the direct payments’ regime, the promotion of agricultural products and the regimes applicable to the outermost regions and the smaller Aegean islands [Official Journal L 228 of 1.9.2009].

Application of certain EU competition rules to agricultural products

Application of certain EU competition rules to agricultural products

Outline of the Community (European Union) legislation about Application of certain EU competition rules to agricultural products

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Agriculture > General framework

Application of certain EU competition rules to agricultural products

Document or Iniciative

Council Regulation (EC) No 1184/2006 of 24 July 2006 applying certain rules of competition to the production of and trade in certain agricultural products [See amending acts].

Summary

This regulation states that, except for certain exceptions detailed below, Articles 101 to 106 of the Treaty on the Functioning of the European Union (TFEU) (ex-Articles 81 to 86 of the Treaty Establishing the European Community (TEC)) apply to all agreements, decisions and practices referred to in Articles 101(1) and 102 TFEU (ex-Article 81(1) and 82 TEC) relating to the production of, or trade in, agricultural products.

There are three exceptions. These general rules do not apply to:

  • agreements, decisions and practices that form an integral part of a national market organisation;
  • agreements, decisions and practices that are necessary in order to attain the objectives of the common agricultural policy (CAP);
  • certain agreements, decisions and practices of farmers or farmers’ associations belonging to a single European Union (EU) country, provided such agreements do not introduce an obligation to charge identical prices, exclude competition or jeopardise the objectives of the CAP.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 1184/2006

24.8.2006

OJ L 214, 24.6.2006

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 1234/2007

23.11.2007

OJ L 299, 16.11.2007

Regulation (EC) No 361/2008

14.5.2008

OJ L 121, 7.5.2008

Regulation (EC) No 491/2009

24.6.2009

OJ L 154, 17.6.2009

Successive amendments and corrections to Regulation (EC) No 1184/2006 have been incorporated into the basic text. This consolidated versionis for reference only.

State aid in the agriculture sector

State aid in the agriculture sector

Outline of the Community (European Union) legislation about State aid in the agriculture sector

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Agriculture > General framework

State aid in the agriculture sector

Document or Iniciative

Community guidelines for state aid in the agriculture and forestry sector 2007-13 [Official Journal C 319 of 27.12.2006].

Summary

The guidelines cover state aid in the agriculture and forestry sector for the period 2007-13 and replace the previous guidelines (2000-06) established for agriculture.

These guidelines apply to state aid granted for the production, processing and marketing of agricultural products. Annex I of the Treaty on the Functioning of the European Union (TFEU) provides a detailed list of the agricultural products included. They do not apply to the fisheries and aquaculture sector but, unlike the previous ones (2000-06), are applicable for aid for some forestry activities.

European Union (EU) countries are still obliged to notify the Commission of state aid for certain Annex I products that are not covered by a common market organisation (CMO), but the Commission may only make observations on the aid schemes. EU countries are invited to take on board these observations to avoid the risk of infringement procedures.

State aid is categorised in the guidelines as follows:

  • rural development measures;
  • aid for risk and crisis management;
  • other types of aid;
  • aid for the forestry sector.

RURAL DEVELOPMENT MEASURES

In line with Regulation (EC) No 1698/2005, which regulates EU support for rural development (the second pillar of the Common Agricultural Policy (CAP)), the guidelines set out the rules governing state aid for rural development measures or other closely related measures.

Aid may be authorised for investment in agricultural holdings in the following cases:

  • aid for investment in agricultural holdings proper;
  • aid for the conservation of traditional landscapes and buildings;
  • aid to relocate farm buildings where this is done in the public interest;
  • aid for necessary investment to improve the environment, hygiene conditions and animal welfare;
  • aid for additional costs due to investment made in EU countries to implement Directive 91/676/EEC;
  • aid for investment in compliance with applicable EU or national rules (only for additional costs incurred by young farmers to implement the rules within 36 months of their establishment).

Aid for investment in connection with the processing and marketing of agricultural products is authorised where it meets the conditions laid down in one of the following provisions:

  • Commission Regulation (EC) No 800/2008;
  • the Commission guidelines on national regional aid for 2007–13.

Environmental and animal welfare aid must meet the general objectives of EU environmental policy. This consists of the precautionary principle and the principles that preventive action should be taken, that as a priority environmental damage should be rectified at source and that the polluter should pay.

Aid to compensate for handicaps in certain areas must contribute to maintaining land use for agriculture, conserving rural areas and maintaining and promoting sustainable farming systems. To qualify for this aid, EU countries must demonstrate the handicaps in question and provide proof that the amount of aid avoids any overcompensation of these handicaps. The level of compensatory payments must be proportionate to the economic impact of the handicaps. Only the economic impact of permanent handicaps that lie outside human control may be taken into account for calculating the amount of compensatory payments.

Aid for meeting standards is designed to cover part of the costs incurred and loss of income as a result of applying standards in the fields of environmental protection, public health, animal and plant health, animal welfare and occupational safety.

Aid for the setting up of young farmers is for persons under 40 years of age who are setting up an agricultural holding for the first time as farm manager. Eligible beneficiaries may also submit a plan to develop their agricultural activities.

Aid for early retirement or for the cessation of farming activities is authorised subject to the conditions for permanent and definitive cessation of commercial farming activities.

Aid for producer groups aims to encourage the establishment of producer groups to concentrate their supply and adapt their production to market requirements. This aid is limited to small and medium-sized enterprises (SMEs). Eligible expenditure includes: rental of suitable premises, purchase of office equipment, including computer hardware and software, administrative costs (including staff), overheads and other expenses.

Aid for land reparcelling aims to support the exchange of plots of agricultural land and to facilitate the establishment of economically viable holdings. Aid may only be granted to cover the legal and administrative expenses involved in reparcelling up to 100 % of actual expenditure incurred.

Aid to encourage the production and marketing of quality agricultural products aims to improve the quality of agricultural products and to encourage farmers to participate in food quality schemes.

Under technical support in the agricultural sector, aid may be granted for the following measures:

  • education and training provided to farmers and agricultural workers;
  • replacement services to cover farmers’ absence due to holiday or sickness;
  • consultancy services provided by third parties;
  • organisation of forums to pool knowledge between enterprises and organisation of and participation in competitions, exhibitions or fairs;
  • publication of factual or scientific data;
  • publications.

Aid in the livestock sector targets support for the maintenance and improvement of the genetic quality of EU livestock.

Aid for the outermost regions and the Aegean islands aimed at meeting the needs of these regions will be examined by the Commission on a case by case basis, in accordance with the specific legal provisions applying to these regions, and with regard to the compatibility of the measures concerned with rural development programmes for the regions concerned.

RISK AND CRISIS MANAGEMENT

State aid may be granted to manage crises in the sector of primary agricultural production. However, distortions of competition must be avoided as far as possible. Requiring a minimum contribution from producers to losses or the cost of such measures provides an incentive for minimising risk. The following risk and crisis management measures are eligible for state aid:

  • aid to compensate for damage to agricultural production or the means of agricultural production;
  • aid regarding TSE (transmissible spongiform encephalopathies) and fallen stock;
  • aid towards the payment of insurance premiums;
  • aid for closing production, processing and marketing capacity.

Aid for rescuing and restructuring firms in difficulty will be assessed in accordance with the applicable EU guidelines on state aid for rescuing and restructuring firms in difficulty.

OTHER TYPES OF AID

Regulation (EC) No 800/2008 provides certain conditions under which aid for employment and aid for research and development are authorised.

There are horizontal aid instruments applicable to the agriculture sector. State aid for the agriculture sector is also covered by more general rules on the compatibility of aid with the TFEU, such as training aid (which is also covered by Regulation (EC) No 800/2008), state aid in connection with investment capital, state aid in the form of guarantees and state aid in the form of public service compensation.

Aid for advertising agricultural products may be authorised if the advertising campaign is centred on quality products – recognised EU designations (such as registered designation of origin – protected designation of origin (PDO) and protected geographical indication (PGI)) or for national or regional quality labels. Advertising campaigns must not be dedicated directly to the products of one or more particular company or companies.

Aid linked to tax exemptions under Directive 2003/96/EC may be granted by applying reduced or zero rates of taxation, provided that no differentiation is made in the agricultural sector. This covers products used as fuel for primary agricultural production or energy and electricity products used for primary agricultural production.

Aid in the form of subsidised short-term loans is no longer authorised.

AID FOR THE FORESTRY SECTOR

Up to now there have not been any specific EU rules governing state aid for the forestry sector. Aid could be granted under EU general rules for all sectors or under certain specific regulations. In the interests of transparency, the Commission has therefore sought to more clearly define EU policy on state aid for the forestry sector. However, the guidelines apply only to living trees and their natural environment in forests and other wooded land. They do not apply to state aid for forest-based industries, timber transport, wood processing or other forestry resources used as products or for the purpose of energy generation.

Aid in the forestry sector is authorised for the following purposes:

  • to contribute directly towards maintaining and enhancing the ecological, protective and recreational functions of forests, local biodiversity and a healthy forest ecosystem;
  • afforestation of agricultural and non-agricultural land, establishment of agri-forestry systems on agricultural land, Natura 2000 payments, payments for the forestry environment, restoring forest potential, introducing prevention systems, and non-productive investments;
  • to cover additional costs and loss of revenue linked to using more demanding environmentally friendly forestry techniques than those imposed by the rules, if the owners concerned undertake voluntarily to use these techniques and this commitment meets certain conditions;
  • to purchase forestry land, provided that the intensity of aid is within the limits set for aid for investment in agricultural holdings;
  • training for forestry owners and workers and for consultancy services provided by third parties;
  • setting up forestry associations;
  • support for initiatives to spread new techniques, pilot or demonstration projects under the conditions laid down in the chapter on technical assistance in the agricultural sector in the guidelines.

PROCEDURES

All new aid schemes and all new aid must be notified to the Commission before they are implemented, unless the aid is covered by one of the exemption regulations adopted by the Commission. In contrast to the guidelines for 2000-06, only aid schemes of limited duration are now authorised, with the maximum duration being seven years. These new guidelines apply from 1 January 2007.

EU countries must submit annual reports and the Commission reserves the right to request additional information.

These guidelines apply until 31 December 2013. However, the Commission reserves the right to amend them in the light of important considerations of competition policy, agricultural policy, human and animal health or in order to take account of other EU policies or international commitments.

BACKGROUND

The new guidelines form part of the 2003 reform of the CAP, which confirms the importance of rural development and shows the Commission’s concern to make aid granted by EU countries in the agriculture sector more coherent. The guidelines for the period 2007-13 are based on Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development, and in particular Articles 88 and 89 thereof, which contain specific provisions regarding state aid.

Exceptional trade measures

Exceptional trade measures

Outline of the Community (European Union) legislation about Exceptional trade measures

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Enlargement > The stabilisation and association process: the western balkans

Exceptional trade measures

Document or Iniciative

Council Regulation (EC) No 1215/2009 of 30 November 2009 introducing exceptional trade measures for countries and territories participating in or linked to the European Union’s Stabilisation and Association process (codified version).

Summary

The Western Balkan countries benefit from exceptional trade measures for their imports into the European Union (EU). These countries and territories are part of the Stabilisation and Association process.

The exceptional trade measures shall apply until 31 December 2010.

Trade preferences

Products originating in Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Montenegro, Serbia and Kosovo shall be imported into the European Union without customs duties * or charges having equivalent effect and without quantitative restrictions * or measures having equivalent effect.

In addition, these trade preferences shall apply to certain agricultural products.

Conditions for entitlement

To benefit from the preferential measures, countries and territories must:

  • comply with the definition of originating product provided for in Regulation (EEC) No 2454/93; the products must have been wholly manufactured or have undergone sufficient processing in the country or territory;
  • undertake not to increase the level of taxes or restrictions on products imported from the EU;
  • combat fraud by means of administrative cooperation with the EU.

Beneficiaries should also engage in effective economic reforms and in cooperation with other countries concerned by the Stabilisation and Association process, in particular through the creation of a regional free trade area.

The Commission may suspend the trade preferences in whole or in part if a country fails to comply with its obligations.

Agricultural and fishery products

The customs duties applicable to certain fishery products and certain wines shall be suspended, within the limits defined in Annex I.

The customs duties applicable to imports of veal (baby beef) originating in Bosnia and Herzegovina, Serbia and Kosovo are defined in Annex II. The volume of the total annual tariff quota * is 11 475 tonnes, distributed as follows:

  • 1 500 tonnes (carcass weight) for products originating in Bosnia and Herzegovina;
  • 9 175 tonnes (carcass weight) for products originating in the customs territories of Serbia and Kosovo.

Imports of sugar products originating in Bosnia and Herzegovina, Serbia and Kosovo shall be subject to annual tariff quotas:

  • 12 000 tonnes (net weight) for products originating in Bosnia and Herzegovina;
  • 180 000 tonnes (net weight) for products originating in the customs territories of Serbia and Kosovo.

Regulation (EC) No 1234/2007 establishes procedures for the implementation of tariff quotas in relation to these products.

The Commission may take protective measures if imports of agricultural and fishery products cause serious disturbance to the EU’s internal market.

Keywords
  • Customs duties: a duty which alters the price of an imported product, irrespective of its name or technique, which results in a restriction on the free movement of goods.
  • Quantitative restriction: any trade regulation which may have the effect of limiting imports of goods, in terms of quantity or value (e.g. import quota).
  • Tariff quota: a trade measure which permits the total or partial suspension of the duties normally paid on an imported product, during a period of time or for a limited volume.

References

Act Entry into force – expiry date Deadline for transposition in the Member States Official Journal

Regulation (EC) No 1215/2009

4.1.2010 – 31.12.2010

OJ L 328 of 15.12.2009

Related Acts

Proposal for a Regulation of the European Parliament and of the Council on amending Council Regulation (EC) No 1215/2009 introducing exceptional trade measures for countries and territories participating in or linked to the European Union’s Stabilisation and Association process [COM(2010) 54 final- Not published in the Official Journal].
This Proposal aims to extend the validity of the trade preferences granted to the Western Balkan countries until 2015.
Procedure: 2010/0036/COD

Specific measures for the outermost regions

Specific measures for the outermost regions

Outline of the Community (European Union) legislation about Specific measures for the outermost regions

Topics

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Agriculture > General framework

Specific measures for the outermost regions

Document or Iniciative

Council Regulation (EC) No 247/2006 of 30 January 2006 laying down specific measures for agriculture in the outermost regions of the Union [See amending acts].

Summary

The Outermost Regions (OR) are listed in Article 349 of the Treaty on the Functioning of the EU:

  • the French Overseas Departments (OD): Guadeloupe, French Guiana, Martinique, Réunion, Saint-Barthélemy, Saint-Martin;
  • the Azores and Madeira (Portugal);
  • the Canary Islands (Spain).

These regions are called ‘outermost’ due to their geographical remoteness from Europe. The OR generally have a small surface area and are exposed to difficult climates. All these factors present difficulties for the agricultural development of the OR.

This Regulation lays down measures specific to the OR in the area of agriculture. The objective is to meet the additional costs related to the supply arrangements and agricultural activities of these regions.

Specific supply arrangements

Some agricultural products (listed in Annex I to the Treaty), considered to be essential for human and animal consumption or for the production of other products, are covered by specific support arrangements (or SSAs). Under this system, limited amounts of these products may be introduced from the EU with the granting of aid to cover a part of the additional costs related to remoteness or from third countries without being subject to any kind of import duty.

The maximum amounts of products covered by these arrangements are established in a forecast supply balance produced by Member States before being approved by the Commission.

The products covered by these arrangements can only be exported following the payment of import duties and the reimbursement of aid received under these arrangements. This condition does not apply to products which are exchanged between French overseas departments nor to products processed in the outermost regions using products which have benefited from the special arrangements, if they are:

  • exported to third countries or dispatched to the rest of the EU within the limits of dispatches or exports as part of traditional trade flows;
  • exported to third countries as part of regional trade flows;
  • dispatched from the Azores to Madeira or vice versa;
  • dispatched from Madeira to the Canary Islands or vice versa.

Under the specific supply arrangements, no import duty is due on certain types of sugar imported into Madeira and the Canary Islands and certain products from the rice sector imported into Réunion. Aid is also paid for supplies of milk-based preparations imported into the Canary Islands, which are not included in Annex I to the Treaty.

Support for local agricultural production

Community support programmes promote local agricultural production. They are prepared by the competent authorities appointed by the Member States concerned. Their preparation should take EU legislation and policy into account.

The Regulation stipulates that the Community support programmes should indicate:

  • a quantified description of the agricultural production situation in the regions in question;
  • a description of the strategy proposed and an appraisal showing the expected economic, environmental and social impact;
  • a description of the measures contemplated;
  • a schedule for the implementation of the measures and a general indicative financing table showing the resources to be deployed;
  • proof of the compatibility and consistency of the various measures under the programmes and a definition of the criteria and quantitative indicators to be used for monitoring and evaluation;
  • the steps taken to ensure the programmes are implemented effectively and appropriately, the definition of quantified indicators for use in programme evaluation and the provisions for checks and penalties;
  • the designation of the competent authorities and bodies responsible for implementing the programme, the designation of associated bodies and socio-economic partners, and the results of the consultations held.

Annual financial resources

The specific supply arrangements and the measures to promote local agricultural production benefit from the following annual financial allocations (in EUR million):

2007 financial year 2008 financial year 2009 financial year 2010 financial year 2011 financial year

French overseas departments

126.6

262.6

269.4

273.0

278.41

Azores and Madeira

77.9

86.98

87.08

87.18

106.21

Canary Islands

127.3

268.4

268.4

268.4

268.42

As regards the specific supply arrangements, financing should not exceed the following amounts:

  • For the French overseas departments: EUR 20.7 million
  • Azores and Madeira : EUR 17.7 million
  • Canary Islands: EUR 72.7 million

Accompanying measures

In addition to the specific supply arrangements and the Community support programmes, this Regulation also introduces other types of derogating measures promoting the agricultural development of the OR.

First, the Regulation provides for the option of increasing European financial aid provided to the OR under the Common Agricultural Policy. The OR benefit from derogations with regard to the maximum eligible amounts of financing from the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD).

In addition, the Regulation provides for the option for Member States of granting State aid for the production, processing and marketing of agricultural products listed in Annex I to the Treaty. However, this State aid remains subject to authorisation by the Commission.

Furthermore, France and Portugal may present programmes to the Commission for the control of organisms harmful to plants or plant products (with the exception of bananas) in their respective outermost regions. The EU contributes to the financing of these programmes on the basis of a technical analysis of the circumstances at the regional level, up to 60 % of eligible expenditure for the French overseas departments and 75 % for the Azores and Madeira.

Lastly, this Regulation makes provisions for derogations and exemptions that are specific to the outermost regions in four sectors:

  • wine: the Azores, Madeira and the Canary Islands benefit from derogations to Regulation (EC) No 1234/2007 for abandonment premiums, aid for release from storage and measures concerning distillation.
  • milk: only producers in the Azores are regarded as having participated in the overrun of the reference quantity for the purposes of sharing the additional levy under Regulation (EC) No 1788/2003. Madeira (within a local production limit of 4 000 tonnes of milk) and the French overseas departments are exempt from the additional levy scheme applicable to producers of cow’s milk laid down by Regulation (EC) No 1788/2003. Madeira is permitted to produce, solely for local consumption purposes, UHT milk reconstituted from Community milk powder, by derogation from Council Regulation (EC) No 2597/97.
  • livestock farming: the French overseas departments and Madeira may import bovine animals from third countries without applying the customs duties. This practice is allowed until the herd of local young male bovine animals reaches a sufficient level to ensure the continuation and development of local animal production.
  • tobacco: Spain may grant aid for the production of tobacco in the Canary Islands up to the limit of 10 tonnes per year. In addition, no customs duties are applied to direct imports into the Canary Islands of certain raw and semi-manufactured tobaccos.

Context

Agriculture in the outermost regions has benefited from the POSEI system (Programme of Options Specifically Relating to Remoteness and Insularity) since 1991 for the French OD (POSEIDOM) and since 1992 for the Canary Islands (POSEICAN), the Azores and Madeira (POSEIMA). The objective of the POSEI system consisted of taking into consideration the geographical and economic handicaps of these regions.

This Regulation therefore reforms the POSEI system and repeals Regulations No 1452/2001, No 1453/2001 and No 1454/2001.

REFERENCES

Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 247/2006

15.2.2006

OJ L 42, 14.2.2006

Amending Act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 318/2006

3.3.2006

OJ L 58, 28.2.2006

Regulation (EC) No 2013/2006

1.1.2007

OJ L 384, 29.12.2006

Regulation (EC) No 1276/2007

31.10.2007

OJ L 284, 30.10.2007

Regulation (EC) No 674/2008

24.7.2008

OJ L 189, 17.7.2008

Regulation (EC) No 72/2009

1.2.2009

OJ L 30, 31.1.2009

Regulation (EC) No 73/2009

1.2.2009

OJ L 30, 31.1.2009

Regulation (EC) No 641/2010

24.7.2009

OJ L 194, 24.7.2010

The successive amendments and corrections to Regulation (EEC) No 247/2006 have been incorporated into the original text. This consolidated versionis of documentary value only.

Related Acts

Rules for application

Commission Regulation (EC) No 793/2006 of 12 April 2006 laying down certain detailed rules for applying Council Regulation (EC) 247/2006 laying down specific measures for agriculture in the outermost regions of the Union [Official Journal L 145 of 31.5.2006].

See consolidated version .

Community support for combating harmful organisms

Commission Decision 2007/609/EC of 10 September 2007 on the definition of the measures eligible for Community financing in the programmes for the control of organisms harmful to plants and plant products in the French overseas departments, in the Azores and in Madeira [Official Journal L 242 of 15.9.2007].

Commission Decision 2009/126/EC of 13 February 2009 on the Community’s financial contribution to a programme for the control of organisms harmful to plants and plant products in the French overseas departments for 2009 [Official Journal L 44 of 14.2.2009].

Notification of information

Commission Regulation (EC) No 792/2009 of 31 August 2009 laying down detailed rules for the Member States’ notification to the Commission of information and documents in implementation of the common organisation of the markets, the direct payments’ regime, the promotion of agricultural products and the regimes applicable to the outermost regions and the smaller Aegean islands [Official Journal L 228 of 1.9.2009].

Green Paper on agricultural product quality

Green Paper on agricultural product quality

Outline of the Community (European Union) legislation about Green Paper on agricultural product quality

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Food safety > Food safety: general provisions

Green Paper on agricultural product quality

The aim of this consultation is to ensure a strategic and regulatory framework for the protection of agricultural products and to promote their quality. In this respect, the Commission intends to open a wide discussion on the existing instruments, on how they could be improved and on new initiatives which could be considered. Three areas are being reviewed: farming requirements and marketing standards, existing quality schemes and certification schemes.

Document or Iniciative

Green Paper of 15 October 2008 on agricultural product quality [COM(2008) 641 final – Not published in the Official Journal].

Summary

Quality is the European farmers’ most potent weapon in facing competition from emerging countries. In Europe the quality of agricultural products rests on the highest levels of safety guaranteed by Community legislation throughout the whole of the food chain and on other aspects (methods and location of production, etc.).

Quality issues related to food safety which are already covered by other Community actions on nutritional labelling or animal welfare do not form part of this consultation.

Production requirements and marketing standards

Food produced in the European Union (EU) adheres to a range of farming requirements. The aim of these requirements is to ensure that all products placed on the market comply with hygiene and safety standards and also respond to a number of environmental, ethical, social, etc. concerns. Many of these farming requirements -those not referring to product hygiene and safety – do not necessarily apply in respect of imported foodstuffs. However, European consumers cannot distinguish between products which adhere to these standards and those which do not. In order to better inform consumers, it is important to ask stakeholders about the possibility of creating a symbol which indicates that a product has been produced in compliance with certain production rules or on the need to indicate the place of production (EU/Non-EU) of primary products.

European marketing standards replace the different national standards. Their aim is to help farmers to offer quality products which meet consumer expectations and facilitate price comparison fordifferent qualities of product. For the majority of agricultural products, they will take the form of regulations that lay down definitions of products, minimum product standards, product categories and labelling requirements. As part of the consultation, stakeholders are asked about the need to define and impose compulsory elements (farming requirements, quality classifications, etc.), reserved terms (term ‘farmhouse’, ‘mountain product’) at the European level and on the need to simplify the current marketing standards.

European quality schemes

The system of geographical indications ensures the protection of intellectual property. This system includes Protected Designations of Origin (PDO) and Protected Geographical Indications (PGI) which describe the characteristics (PDO) or the reputation (PGI) of a product which are connected to their geographical area of origin. For consumers, geographical indications guarantee authentic, quality products which meet their expectations. To benefit from a PDO, all stages of production should, in principle, have taken place in the geographical area of origin. In the case of a PGI only one stage of production will suffice (this is the case with spirits in particular). The Green Paper aims to identify the necessary means to improve and develop the system of geographical indications as well as to protect this system in third countries.

The system of Traditional Specialities Guaranteed (TSG) was created in 1992. The TSGs are agricultural products or foodstuffs that have traditional composition or that are produced using traditional raw materials or traditional methods of production. Since its creation, only 20 TSGs have been registered under this system. This relatively low number raises the question whether a better means of identifying and promoting traditional specialities exists.

Since the adoption of Regulation (EC) No 834/2007 on the production and labelling of organic products, the main challenge has been to create an internal market for organic food. At present the market for organic food functions essentially along national lines. It is important, therefore, to consider possibilities which would enable the creation of a genuine single market for organic food at the EU level.

The system aimed at promoting quality products originating from the outermost regions rests on the introduction of a logo. To obtain this logo, producers must adhere to a number of requirements defined in compliance with Community regulations or in their absence, international regulations. To what extent could trade organisations, following the example of Spain and France, adopt additional specific requirements aimed at improving the quality of regional products and increasing the volume of quality agricultural products originating from the outermost regions of the EU?

Should other systems emerge, for example to identify products of ‘high-nature value’ or ‘mountain’ products?

Quality certification schemes

For consumers, food quality certification schemes offer additional guarantees that the label claim can be relied on. These schemes concern not only compliance with compulsory production standards, but also requirements such as environmental protection, animal welfare, fair trade, religious or cultural considerations, farming methods, product origin, etc. These requirements have led to a multitude of certification schemes and quality labels which sometimes give rise to concerns about the transparency of the requirements of the systems in question, the reliability of the claims and the fairness of commercial relations. The Green Paper opens the debate on how to protect the consumer and avoid additional constraints and costs for producers.

Context

The Commission invites all organisations and citizens who have an interest in the quality of agricultural products to submit their contributions before 31 December 2008. These contributions will form a basis for developing a Communication (Commission document establishing strategic guidelines) which should be published in May 2009.

Improving communication on agricultural product quality

Improving communication on agricultural product quality

Outline of the Community (European Union) legislation about Improving communication on agricultural product quality

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Food safety > Food safety: general provisions

Improving communication on agricultural product quality

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on agricultural product quality policy [COM(2009) 234 final – Not published in the Official Journal].

Summary

In this Communication, the Commission defines strategic orientations to improve, in the medium term, communication between farmers, buyers and consumers as regards agricultural product quality, to harmonise European Union (EU) rules on the quality of these products and to improve and simplify existing schemes and labels.

Marketing standards

Marketing standards guarantee fair competition and avoid the consumer being misled as to the characteristics of products. There are four types of information contained in current marketing standards:

  • a basic definition of the product identity (for example the definition of ‘butter’, ‘fruit juice’, etc.);
  • product classification (for example the minimum fat content of ‘semi-skimmed milk’ or ‘large’, ‘medium’ and ‘small’ classes of eggs, etc.);
  • reserved terms bestowing added value upon the product (for example what constitutes ‘first cold pressed’ olive oil or ‘traditional method’ sparkling wine, etc.);
  • labelling requirements concerning the origin or place of farming.

In the future, the Commission plans to:

  • establish a general basic standard. This would cover those matters where a voluntary approach might distort the internal market or where compulsory labelling is necessary to provide consumers with basic information about products;
  • extend labelling systems identifying the place of farming to products other than those which are covered at this time;
  • examine the feasibility of laying down optional reserved terms for ‘product of mountain farming’ and ‘traditional product’. The term ‘traditional product’ could replace the current system of ‘traditional specialities guaranteed’ which has not reached its full potential; and
  • contribute to developing international standards.

Geographical indications

Geographical indication schemes encourage high quality farming, safeguard protected names from unauthorised use and imitation, and help consumers by providing them with information about products’ specific attributes. At this time, there are three schemes (for wines, for spirit drinks, and for agricultural products and foodstuffs) and two instruments: the PDO (protected designation of origin) and the PGI (protected geographical indication).

After the consultation, the Commission plans to:

  • create a single register bringing together the three existing systems (wines, spirits, and agricultural products and foodstuffs), while preserving the specificities of each system; and
  • enhance the protection of geographical indications at international level.

Organic farming

Community legislation on organic farming was amended in 2007 as part of the 2004 action plan for organic farming.

In order to foster trade in organic products, the Commission:

  • has created a logo that will be mandatory for all organic products from 2010;
  • will work with third countries towards recognition for organic farming standards;
  • will contribute to improving the directives of the
    Codex Alimentarius
    on organic farming.

Certification schemes

National or private food quality certification schemes provide a guarantee that agricultural products comply with mandatory farming standards and meet requirements concerning the protection of the environment, animal welfare, etc., defined in the scheme’s specifications. However, they may confuse consumers and engender administrative costs and costs for farmers.

The Commission will establish, in consultation with the Advisory Group on Quality, good practice guidelines for private certification schemes in order to limit these drawbacks.

Context

This Communication is based on the consultation relating to the Green Paper on agricultural product quality published in October 2008, and on the High Level Conference organised on the same theme by the Czech presidency in March 2009.

The strategic orientations set out in this Communication offer a logical framework for the future policy on agricultural product quality. Comments from the other institutions but also from stakeholders will help to further refine and clarify these suggestions.

Production and labelling of organic products

Production and labelling of organic products

Outline of the Community (European Union) legislation about Production and labelling of organic products

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Environment > Tackling climate change

Production and labelling of organic products

Document or Iniciative

Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labelling of organic products and repealing Regulation (EEC) No 2092/91 [See amending act(s)].

Summary

This Regulation lays down a new legal framework for organic products. It sets out the objectives and principles applicable to this type of production and illustrates the rules on production, labelling, controls and trade with third countries. This Regulation enters into application on 1 January 2009.

Scope

The framework established by this Regulation governs:

  • agricultural products (including aquaculture products), either processed or unprocessed and intended for human consumption;
  • animal feed;
  • vegetative propagating material and seed used for crops;
  • yeasts used as food or feed.

This Regulation contains the basic objectives and general principles for organic farming. The objectives focus on sustainable agriculture and production quality, which must meet consumers’ needs. The general principles concern, inter alia, specific production methods, the use of natural resources and stringent restrictions on synthetic chemical inputs. Furthermore, the Regulation lays down specific principles concerning farming, the processing of organic food and organic animal feed.

Production rules

According to the general rules for organic production, genetically modified organisms (GMOs) are prohibited in all their forms. Rules concerning the labelling of food allow operators to ensure compliance with this prohibition. Treatment by ionising radiation is also prohibited.

Those wishing to operate both types of agricultural production (organic and non-organic) must ensure that animals and land for these two activities are separated.

Organic plant production must comply with certain rules concerning:

  • ground treatment, which must preserve life and the natural fertility of the ground;
  • the prevention of damage, which must be based on natural methods but which can make use of a limited number of plant protection products authorised by the Commission;
  • seed and plant propagation material, which must be produced using organic methods;
  • cleaning products, for which authorisation must be requested from the Commission.

Wild plants collected in some areas are also classified as organic products if they comply with certain conditions relating to their harvest and provenance. Seaweed may also be considered as an organic product as long as its area of production and harvest comply with certain conditions.

Organic livestock production must comply with certain rules concerning:

  • the animals’ origin – they must have been born and reared in organic holdings;
  • livestock husbandry practices, which, inter alia, relate to certain features of animal housing;
  • animal breeding methods, generally natural;
  • animal feed, which must be organic;
  • the prevention of disease;
  • cleaning and disinfection, involving the exclusive use of products authorised by the Commission.

Similar specific rules apply to aquaculture animals.

The Commission authorises the use of a limited number of products and substances in organic farming. These products may be for plant care, animal feed and the cleaning of buildings used for livestock and plant production. The Commission may also set certain limits and conditions for the application of these products.

Holdings which are entering into a new organic farming activity must comply with a conversion period. The rules laid down in this Regulation also govern this conversion period.

Organic processed feed must contain organic raw materials and may not be processed using chemical solvents. Processed food must contain mainly ingredients of agricultural origin. Other ingredients are permitted if authorisation has been requested from the Commission. Organic yeast must be produced from organic substrates and other authorised ingredients.

The Commission may make exceptions to provisions concerning objectives, production rules and labelling. These exceptions will be limited in time and apply to certain particular cases.

Labelling

Labelling, advertising or commercial documents may use terms such as “eco” and “bio” to describe an organic product, its ingredients, or raw materials.

The labelling of an organic product must be clearly visible on the packaging and contain a reference to the control body that certifies the product concerned.

From 1 July 2010, the use of the European Union logo on organic food products will be mandatory, as will an indication of the provenance of raw materials used in the product. This indication must be shown in the same field of vision as the Community logo.

Controls

Compliance with the provisions contained in this Regulation will be guaranteed by a system of controls based on Regulation (EC) No 882/2004 and precautionary and control measures established by the Commission. This system guarantees the traceability of food pursuant to Regulation (EC) No 178/2002.

An assessment of the risk of infringement will determine the type and frequency of controls. These will be organised by authorities appointed by Member States. Under certain conditions, these authorities may delegate control duties to accredited bodies, but they shall remain responsible for the supervision of the controls carried out and the granting of exemptions. Member States must notify the Commission regularly of the list of authorities and control bodies (list of bodies or authorities responsible for control published in 2007 ).

The authorities must also control the activities of each operator involved in the marketing of an organic product before it is placed on the market. Following this control, the operator receives documentary evidence which certifies that it complies with the provisions of this Regulation. If irregularities are noted, the authority shall ensure that the labelling of the products at issue do not contain any reference to organic production.

Trade with third countries

Products from third countries may also be placed on the Community market as organic products as long as they comply with the provisions of this Regulation and if they have been subject to control. This control may be carried out either by a body recognised by the European Community, or by an accredited control body.

Marketing and statistical surveillance

The marketing of an organic product may not be hindered in any way by any authority of a Member State other than the authority which has inspected the product.

The Commission carries out statistical surveillance activities based on the data provided by Member States. The Standing Committee on Organic Farming assists the Commission in defining policies for organic farming.

Context

This Regulation has been produced as part of a series of initiatives to foster organic farming. In the same framework, the Commission adopted an Action Plan for Organic Food and Farming in 2004.

The first legal framework for organic farming was laid down in 1991 with Regulation (EC) No 2092/91. Since its adoption, several amendments have been introduced into this Regulation, because organic farming has become more and more important in all Member States (annual growth for this sector is estimated at almost 25 % between 1993 and 1998 and around 30 % since 1998). A report on organic farming will be published by the end of 2011.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 834/2007

27.7.2007

OJ L 189 of 20.7.2007

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 967/2008

10.10.2008

OJ L 264 of 3.10.2008

Related Acts

Rules for implementation

Commission Regulation (EC) No 889/2008 of 5 September 2008 laying down detailed rules for the implementation of Council Regulation (EC) No 834/2007 on organic production and labelling of organic products with regard to organic production, labelling and control [Official Journal L 250 of 18.9.2008].

Agricultural commodities, dependence and poverty

Agricultural commodities, dependence and poverty

Outline of the Community (European Union) legislation about Agricultural commodities, dependence and poverty

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

External trade

Agricultural commodities, dependence and poverty

Document or Iniciative

Communication of 12 February 2004 from the Commission to the Council and the European Parliament: Agricultural commodity chains, dependence and poverty – a proposal for an EU Action Plan [COM(2004) 89 final – Not published in the Official Journal].

Summary

The Communication establishes policy priorities for addressing the six main challenges facing commodity dependent developing countries (CDDCs):

  • treating commodity chains and dependence as priority issues in combating poverty;
  • remedying the long-term decline in prices;
  • managing commodity risks and providing access to financing;
  • diversifying production to include non-traditional commodities;
  • promoting integration in the international trading system;
  • encouraging the use of viable business and investment practices in the CDDCs.

The Communication focuses on agricultural (not mineral) commodities traded and marketed internationally, since these products are directly linked to poverty.

It does not cover timber as the Commission has already drawn up a strategy and provided a specific budget line for this product. The Commission has also implemented an action plan to combat illegal logging.

Treating commodity chains and dependence as priority issues in combating poverty

Commodity chains have a major impact on the poorest sections of the population and should be treated as a priority in development strategies and combating poverty.

To this end, the Commission proposes:

  • helping the CDDCs develop national commodity strategies as part of the fight against poverty;
  • enhancing the strategies developed in international commodity bodies for each commodity category.

Remedying the long-term decline in prices

As demand for commodities has been outstripped by the increase in supply on the world market, there has been a long-term decline in commodity prices.

To address this problem, the Commission proposes:

  • encouraging implementation of commodity chain strategies in the CDDCs, particularly in terms of improving capacity and support services at producer level, establishing basic infrastructure in production regions and pursuing policy reforms at macroeconomic level;
  • setting up support services at regional level to promote regional cooperation among farmers’ networks, regulatory bodies, research institutions, the services responsible for infrastructure, etc.;
  • supporting regional integration by concluding economic partnership agreements with the African, Caribbean and Pacific (ACP) countries.

Managing commodity risks and providing access to financing

There is high price volatility on the agricultural commodities markets, and this creates uncertainty and affects the willingness and capacity of farmers to invest.

To address this phenomenon the Commission proposes:

  • improving producer access to commodity risk insurance and trade finance;
  • encouraging the development of shock management tools for the macroeconomic level;
  • improving the CDDCs’ access to the Flex compensatory mechanism. Flex is an EU instrument that allows the countries concerned to compensate for sudden declines in export earnings.

Support for diversification

Expanding the markets for both inputs and output products would reduce investment risks.

To achieve this the Commission proposes:

  • offering CDDC governments technical assistance with policy choices concerning diversification;
  • providing more support for implementation of diversification and growth strategies;
  • supporting the preparation and implementation of a growth-focused strategy allowing products traded at national level to be developed; such a strategy would include abandoning unprofitable commodities;
  • increasing aid to the private sector, drawing on the available instruments for private sector development in non-traditional sectors.

Promoting integration in the international trading system

International trade rules are important for the CDDCs and commodity producers. Rules on domestic support, export competition and market access all shape commodity producers’ opportunities, as do measures and standards and other technical regulations.

The Commission therefore proposes:

  • working to achieve a substantial and development-friendly outcome from the current negotiations under the Doha Development Agenda;
  • pursuing reform of its agricultural polices so as to reduce trade distortions as much as possible and monitoring the impact of national aid policies;
  • facilitating CDDC access to the EU market, in particular by revising the generalised preference system;
  • supporting CDDC efforts to profit from their market access, in particular by enhancing helpdesk services.

Encouraging the use of viable business and investment practices in the CDDCs.

The international commodity companies and retailers play a central role in framing the future of the commodity sectors since local entrepreneurs are often unable to compete effectively with these large consolidated corporations whilst remaining independent. Their dependence on the corporate policies of multinational enterprises means that they need to improve their social and environmental practice.

The Commission therefore proposes:

  • fostering social responsibility at international level by promoting the application of viable codes of conduct, supporting the pooling of experience and studying criteria for the establishment of voluntary fair and ethical trading schemes at Community level;
  • supporting CDDCs’ efforts to benefit from companies’ social responsibility and setting up public-private partnerships in some countries to evaluate the experience gained;
  • promoting competition by drawing up common guidelines within the WTO, in particular in the context of regional cooperation.

Background

The prices of some important agricultural commodities (for example, sugar, cotton, coffee and cocoa) fell by 30 to 60% between 1970 and 2000. This has led to macroeconomic imbalances in the developing countries concerned, reducing export earnings, debt repayment capacity, imports, credit availability, government revenue and the provision of basic services (health care and education).

There are about fifty highly commodity dependent developing countries (with export revenues based on a maximum of three commodities). They are located mainly in Sub-Saharan Africa, but also in the Caribbean and Central America. They are mainly least developed countries (LDCs), landlocked countries or islands.

Many of these countries are caught in a trap of declining income and investment, stagnating competitiveness, endemic poverty and dependence. A lack of resources means that their commodities sectors are finding it ever harder to take on international competition, handle change and deal with the situation facing them.

Related Acts

Commission communication of 12 February 2004 to the Council and Parliament: Proposal for an EU-Africa partnership in support of cotton-sector development [COM(2004) 87 final – Not published in the Official Journal].

Concerned about the crisis in the cotton sector in African ACP countries – as highlighted at the WTO ministerial conference in Cancún – the Commission proposes, as part of its action plan for agricultural commodities, a partnership in the cotton sector centred on two series of measures. The first set of measures is designed to achieve more equitable commercial conditions on international cotton markets by giving priority to market access, the reduction of internal support, support for exports and trade-related technical assistance. The second concerns support for African regions and countries producing cotton, and comprise measures intended to consolidate the competitiveness of the African cotton sector, help the regions dependent on this product to diversify, and mitigate the effects of price volatility. The Commission stresses the importance of dialogue with the African countries concerned and identifies the financial instruments that can be used to support this partnership.