WORLD TRADE  
ORGANIZATION  G/AG/N/EEC/69 
24 January 2011 
 (11-0378) 
Committee on Agriculture Original:   English 
  
 
NOTIFICATION  
 
  The following submission, dated 12 January 2011, is being circulated at the request of the Delegation of the  European Union .  The notification concerns new or modified domestic support 
measures exempt from reduction ( Table DS:2 ). 
 G/AG/N/EEC/69 
Page 2  
 
  Table DS:2 
 
DOMESTIC SUPPORT:  European Union 
Notification under Article 18:3 of the Agreement:  
New or modified domestic support measures exempt from reduction  
 
(1) Full title of measure 
  A reform of the fruit and vegetables sector applies as from 1 January 2008. 
 
The aim of the reform is to improve the co mpetitiveness and market orientation of the fruit 
and vegetables sector, reduce income fluctuations  resulting from crises, promote consumption 
– so contributing to improved public health – and enhance environmental safeguards.  The 
new measures cover: 
 
• Integrating the fruit and vegetables sect or into the Single Payment Scheme; 
 
• Encouraging growers to join Producer Organizations; 
 
• Abolishing export subsidies for fruit and vegetables; 
 
• Increasing EU funding for promoti on and organic production;  and 
 
• Requiring a minimum level of environmental spending. 
 
Support in the fruit and vegetables sector is structured through so-called Producer 
Organizations .  Producer Organizations may set up an operational fund  to finance 
operational programmes  approved by member States.  The fund is financed with 
contributions of the organization's members, as well as with EU financial assistance.  To be 
entitled for EU support, an operational programme  must contribute to the achievement of 
objectives, such as planning of producti on, improvement of products' quality and 
environmental protection.  Producer Organizations have a set of tools for crisis prevention and 
management which may be implemented under their operational programme.  In regions of 
the member States where the degree of organization of producers is particularly low, member 
States may be authorized to pay a national fi nancial assistance which is additional to the 
operational fund.  Under certain conditions, this national financia l assistance may be partially 
reimbursed by the EU. 
 
Producer Groups  wishing to acquire recognition as Producer Organization may receive, 
during a transitional period, national and EU  support to encourage their formation and 
facilitate their administrative operation as well as support to cover part of the investments 
required to attain recognition.  To be elig ible for support, they have to submit phased 
recognition plans, which specify the investment s necessary to attain recognition.  These aids 
are limited to Producer Groups in member States  that joined the EU on 1 May 2004 or later, 
in the outermost regions and in the smaller Aegean Islands.  These arrangements apply from 
1 January 2008. 
 
More recently, a European Union-wide scheme to provide fruit and vegetables to school 
children, a School Fruit Scheme , was adopted.  Member States w ho wish to participate must  G/AG/N/EEC/69 
 Page 3 
 
 
  present national strategies.  The scheme is co-fi nanced by EU and member States funding and 
it applies as from the 2009/2010 school year. 
 
Several of the support measures contained in the reform comply with the Green Box criteria.  
These measures are described in detail under part two of this notification.  Certain measures 
related to crisis prevention and management  such as market withdrawals by Producer 
Organizations, support for non-harvesting and su pport for harvest insurance do not comply 
with the Green Box criteria and will therefore be  notified as Amber Box support.  No further 
mention is made of these measures in this no tification.  Transitional Blue Box support for 
fruit and vegetables for processing replaces earli er Amber Box support.  However, this 
support will be phased out in the context of the decoupling operation wh ich will be completed 
by the 2014 budget year at the latest. 
 
(2)  Detailed description of measure with reference to criteria, i.e. those in 
 
Annex 2, paragraph 6 
 
• A decoupled payment with eligibility and s upport amount based on historical references 
is established within the frame work of the Single Payment Scheme (SPS, see notification 
G/AG/N/EEC/58).  It will be progressively introduced throughout products and member 
States, and by the 2014 budget year at the latest the budgetary provision for this 
decoupled payment will be fully integrated in the ceiling of the Single Payment 
Scheme .  No production is required in or der to receive this payment. 
 
Annex 2, paragraph 6 
 
• The new member States applying the Single Area Payment Scheme (SAPS, see 
notification G/AG/N/EEC/58) may grant a decoupled "Separate Fruit and Vegetable 
Payment" .  Eligibility for this payment is based on objective and non-discriminatory 
criteria.  No fruit and vegetables or other pr oduction is required to receive the payments.  
The mention of "fruit and vegetable" in the title of the program refers to past fruit and 
vegetable production used for the determina tion of eligibility of payment entitlements. 
 
Annex 2, paragraph 2(c) 
 
• Support for training  can be included in the operational programmes of Producer 
Organizations. 
 
Annex 2, paragraph 2 
 
• Support for the administrative costs of setting up of mutual funds  is provided. 
 
Annex 2, paragraph 2(f) 
 
• Promotion and communication  tools are used, including in times of crisis.  Higher 
consumption of fruit and vegetables was one of the goals identified in the European 
Commission's White Paper on Nutrition adopted  in May 2007.  Producer Organizations 
can include promotion of fruit and vege table consumption in their operational 
programmes.  Member States adopt deta iled provisions on the implementation of 
promotion and communication measures in times of crisis.  These provisions shall allow for the rapid application of the measures when required. 
 G/AG/N/EEC/69 
Page 4  
 
  Annex 2, paragraph 11 
 
• Support for investments
 to acquire the necessary preliminary recognition of Producer 
Groups is provided.  The investments cove red in the recognition plans focus on such 
objectives as modernisation of farming, increase of the value of products, and 
improvement of infrastructure owned by members. 
 
Annex 2, paragraph 12 
 
• Environmental measures .  At least 10 per cent of the expenditure under Operational 
Programmes must be devoted to environmental measures.  Support compensates for income foregone and cost incurred invol ved in complying with the programme 
requirements.  Every Member State havi ng recognised Producer Organizations is 
required to establish a national framework fo r environmental actions in the fruit and 
vegetable market, which is a part of the National Strategy for sustainable operational 
programmes.  The national framework sets out the objectives of the environmental actions and the specific types of measures th at are eligible for support.  There is a 
60 per cent EU co-financing rate for organic production under an Operational 
Programme. 
 
Annex 2, paragraph 4  
• Free distribution
 of fruit and vegetables to schools, hospitals and charitable bodies and 
the School Fruit Scheme .  Payments compensate for co st incurred or revenue foregone 
in relation to the provision of domestic food aid.  Eligibility to receive the food aid is based on clearly-defined criteria related to  nutritional objectives.  Food purchases for the 
two schemes are made at current market prices or lower. 
 
Article 6.5 (a) (i) 
 
• During the phase-in of decoupling of support for certain fruit and vegetables for 
processing, production-limiting transitional fruit and vegetables payments
 will be 
provided.  These payments are based on fixed area and yield and will, correspondingly to 
the progressive introduction of decoupled pa yments, be phased out by the 2013 budget 
year. 
 
(3) Domestic legislation references  
 
• Council Regulation 1182/2007 of 26 Septem ber 2007 (OJ L273 of 17 October 2007, 
p. 1), which was integrated into Si ngle CMO Regulation (EC) No 1234/2007 of 
22 October 2007 through the adoption of Council Regulation (EC) No 361/2008. 
 
• Implementing rules are laid down in Commiss ion Regulation 1580/2007 of 21 December 
2007 (OJ L350 of 31 December 2007, p. 1). 
 
• The School Fruit Scheme was adopted with Council Regulation (EC) No 13/2009 of 
18 December 2008 amending Regulations (EC) No 1290/2005 on the financing of the common agricultural policy and (EC) No 1234/2007 establishing a common organization of agricultural markets and on specific pr ovisions for certain agricultural products 
(Single CMO Regulation) in order to set up a School Fruit Scheme (OJ L5 of 9 January 
2009, p. 1).  
  G/AG/N/EEC/69 
 Page 5 
 
 
  • Implementing rules are contained in Commission Regulation 288/2009 of 7 April 2009 
(OJ L 94 of 8 April 2009, p.38). 
 
(4) Cost of measure 
 
• The national ceilings for direct payments are increased by approximately 
EUR 800 million to take into account th e measures originating from the fruit and 
vegetables sector.  This increase covers the addition to the decoupled Single Payment 
Scheme  ceiling and the newly created decoupled Separate Fruit and Vegetable 
Payment .  The decoupling operation will be phased  in over time and completed by the 
2014 budget year at the latest. 
 
• The 2008 expenditure for Green Box payments disbursed through Producer 
Organizations  concerned by this notification was EUR 603 million. 
 
• The budget for the School Fruit Scheme  in the 2009/2010 school year is 
EUR 154 million.  This amount contains the support by the EU and the national funding 
by member States. 
 
• The Blue Box transitional fruit and vegetables payments  are limited in time and 
phased out by the 2013 budget year.  First clai ms can be made in 2008 and in payment 
terms, the Blue Box spending kicks in as of the 2009 budget year for an amount of EUR 318 million. 
 
(5) Date of entry into effect 
 
• The reform of the fruit and vegetables sector applies from 1 January 2008. 
 
• The School Fruit Scheme applies from the 2009/2010 school year onwards. 
 
• First claims for the transitional fruit and vegetables payments can be made in 2008. 
 
(6) Period of application 
 
• Indefinite, with the exception of trans itional fruit and vegetables payments.  The 
transitional fruit and vegetables claims can be  made until 2012, inducing last payments in 
the 2013 budget year. 
 
(7) Products to principally benefit (if any individual product(s)) 
 
• The decoupled payments (SPS and Separate  Fruit and Vegetables Payment) do not 
benefit a specific product. 
 
• Support for communication, promotion, training and investment disbursed through the 
Producer Organizations, targets the fruit and vegetables sector in general. 
 
• The environmental programmes disbursed th rough Producer Organiza tions do not benefit 
specific products but target the fruit and vege tables sector in general.  These programmes 
are in compliance with the relevant Annex 2 criteria. 
 G/AG/N/EEC/69 
Page 6  
 
  • Support for free distribution and the School Fr uit Scheme concerns fruit and vegetables, 
processed fruit and vegetables, and bananas. 
 
• The coupled transitional fruit and vegeta bles payments benefit certain fruit and 
vegetables for processing.  G/AG/N/EEC/69 
 Page 7 
 
 
  Table DS:2 
 
DOMESTIC SUPPORT:  European Union 
Notification under Article 18:3 of the Agreement:  
New or modified domestic support measures exempt from reduction  
 
(1) Full title of measure 
 
 Reform of the banana Co mmon Market Organization. 
In 2006, the EU abolished the banana comp ensatory aid scheme and replaced it with an 
increased budget allocation which was added to the so-called POSEI arrangements, i.e. a 
specific scheme supporting agriculture in the out ermost regions of the EU;  since 2007 POSEI 
has become the only support instrument for bananas in those regions.  POSEI stands for 
"Programmes d'Options Spécifiques à l'Éloignement  et l'Insularité" and the regions concerned 
are:  
• France:  La Réunion, Guadeloupe, Martinique, Guyane, St. Barthélemy, St. Martin; 
 
• Portugal:  Azores, Madeira;  and 
 
• Spain:  Canary Islands. 
 
The support for banana production in mainland Europe was abolished and the corresponding 
budget was decoupled and integrated into  the Single Payment Scheme (SPS). 
 
(2)  Detailed description of measure with reference to criteria, i.e. those in 
 
Annex 2, paragraph 6 
 
• Support for bananas produced in regions other than the outermost regions was decoupled.  
Eligibility for the decoupled payment is b ased on support for bananas received in a 
defined and fixed base period. A budgetar y provision of EUR 4.6 million for this 
decoupled payment was integrated in th e ceiling for the Single Payment Scheme . 
 
Article 6.5 (a) i 
 
• The compensatory aid scheme for banana grow ers, which has been in force since 1993 
was abolished as of 2007 and an annual e nvelope of EUR 278.8 million was added to the 
POSEI scheme, which supports producers in th e outermost regions of the EU.  The new 
banana support is production-limiting since the payments are based on fixed 
maximum cultivated areas and yields . 
 
(3) Domestic legislation references  
 
• Council Regulation 247/2006 and Co mmission Regulation 793/2006. 
 G/AG/N/EEC/69 
Page 8  
 
  (4) Cost of measure 
 
• Budgetary provision for decoupled payments:  EUR 4.6 million 
 
• Budgetary envelope for the Blue  Box payments:  EUR 278.8 million 
 
(5) Date of entry into effect  
• 1 January 2007 
 
(6) Period of application 
 
• Indefinite 
 (7) Products to principally benefit (if any individual product(s)) 
 
• The decoupled payments do not benefit a specific product. 
 
• The Blue Box payment benefits bananas. 
  
__________