The reform of the CMO Fruit & Vegetables – Better policy for a stronger Sector

PROGNOSFRUIT 2007 Vilnius, Lithuania DG Agri/C.2

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Better for the …

1. Farmer: Freedom to farm

2. Taxpayer: Sustainable expenditure

3. Citizens: Transparence & coherence

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Better for the …

4. Consumer: Focus on health benefits

5. Environment: Sustaining the effort

6. Global partners: Full WTO conformity

7. Sector: Level playing field

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1.A Better for the FARMER:

Freedom of choice which Producer Organization (PO) to join for which product (fresh & processed)

Simplified mergers and cooperation's (transnational, Associations of PO)

MS to design ‘National programs’ as overall guidelines for Operational Programs (OP)

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1.B Better for the FARMER:

OP to be elaborated in coherence with MS National strategy setting out overall objectives, priorities and eligible measures

Single Payment Scheme (SPS): Integration of all agriculture land in line with respective MS model Application of rules of cross-compliance in line with Rural Development rules (good agriculture practice)

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Share of PO in national F&V production (in 2004, %)Source: AGRI/C.2

0

10

20

30

40

50

60

70

80

90

100

BE CZ DK DE EL ES FR IE IT CY HU MT NL AU PL PT FI SE UK EU-25

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1.C Better for the FARMER:

No ceiling on budget for POs, annual growth rate foreseen due to increased organisation of 50 Mio€

MS with low degree of organisation (under 20% VMP) receive additional aid (e.g. NMS, RUP, PT, EL)

New instrument for crises management, managed by PO to provide for security and stability

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Expenditure of Operational Funds (in 2005, Mio€) Source: AGRI/C.2

0

20

40

60

80

100

120

140

BE CZ DK DE EL ES FR IE IT CY HU NL AT PL PT FI SE UK

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2. Better for the TAXPAYER: Less distortive expenditure: No more export restitutions,

EU-funded market withdrawalsMore sustainable expenditure: 50% co-financing of Operational Programs e.g. for crises management

Overall ceiling of max. EU-cofinanced support up to 4,1% of VMP for POs retained

Rural Development: No double financing of measures eligible both under CMO and Rural Development

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3.A Better for the CITIZENS:

Decoupling of aid: Processing aid abolished, transferred into Member states national SPS envelopes

Coherence: Introduction of performance indicators in Operational Programs

Transparency by publication of MS National Programs for comparison

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EU co-funded expenditure per category (in Mio€) Source: AGRI/C.2

0

100

200

300

400

500

600

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Operational funds Export refunds Withdrawals

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3.B Better for the CITIZENS:

Drastic reduction of withdrawals:

- EU-funded only for free distribution and

- PO co-funded as part of new crises management instrument (max. 33% of OP budget)

Abolishment of export restitutions

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4.A Better for the CONSUMER:

Focus of F&V promotion programs within OP on ‘young consumers’

Free distribution for charitable organisations and also for schools 100% EU-funded

Obligatory labeling of country of origin for all fresh F&V

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4.B Better for the CONSUMER:

Within OPs, if the focus of promotion programs is on young consumers, co-financing rate is increased to 60%

Increase of indicative budget for direct EC-funded promotional actions under reg. 2826/2000 from 6 Mio€ to 12 Mio€

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4.C Better for the CONSUMER:

Council declaration on School Fruit Scheme:

« Commission invite to present as soon as possible a proposal based on the evaluation of the benefits, practicability and administrative costs involved in such a Scheme. »

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5.A Better for the ENVIRONMENT:

Environmental standards (GAP) in line with Rural Development

All area under SPS: cross-compliance fully applicable

Measures to protect the environment not only cover production but the whole marketing chain (transport, packaging et al.)

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5.B Better for the ENVIRONMENT:

OP measures supporting organic production eligible for 60% co-financing

All PO must spend at least 10% of their total Operational Fund on measures to protect the environment

Investments with harmful impact on the environment are not eligible for funding within OP

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Expenditure on environmental measures (% of total OF, 2005) Source: AGRI/C.2

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

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6. Better for the GLOBAL PARTNERS:

All measures in conformity with WTO obligations:

No more export restitutions,

No more processing aid coupled to production

No 100% financing withdrawals except for free distribution

Marketing standards harmonized with international rules

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Extra EU-25 trade (Mio €) in fresh vegetables, 2005 Source: AGRI/C.2

0

200

400

600

800

1 000

1 200

1 400

1 600

1999 2000 2001 2002 2003 2004 2005

Imports

Exports

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7. Better for the SECTOR:

Transition rules for the decoupling of the processing aid in some Member states

Special area-based temporary aid for the restructuring of the soft fruit sector in several Member states

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Background

Objectives of the reformTime table

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To contribute to achieving sustainable production that is competitive both on internal and external markets

To reduce fluctuations in fruit and vegetables producers' income resulting from crises

To increase consumption of fruit and vegetables in the EU

Reform objectives 1

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Reform objectives 2

To continue the efforts made by the sector to maintain and protect the environment

To simplify and where possible reduce the administrative burden for all concerned

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Reform objectives 3

These objectives of the reform have been identified taking into account:

- consistency with the reformed CAP, market support and rural development policy,

- WTO compatibility,

- conformity with the financial perspectives.

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Time table Commission publishes proposal on 24th January 2007

Discussion in Council Working Group and Special Committee for Agriculture

Political agreement in the Council on 11th June 2007 Adoption by the Council in September 2007

Commission implementing rules elaborated by end 2007

Entry into force by 1st January 2008

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Thank you for your attention !

http://ec.europa.eu/agriculture/capreform/fruitveg/index_en.htm