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(2004/C 65 E/018)

WRITTEN QUESTION E-3573/02

by Ilda Figueiredo (GUE/NGL) to the Commission

(13 December 2002)

Subject:   Article 299(2) and social and economic cohesion in the Azores

The outermost regions face particular problems on account of their distance from the EU's centre, their high degree of economic specialisation, their natural disadvantages, the smallness of their market and their high production costs. All of these factors hamper their sustainable development and restrict their competitiveness. A further consideration is geographical dispersion, which applies in the case of the Azores. Special regional-policy and CAP programmes have therefore been drawn up for those regions, whilst the Amsterdam Treaty contains provision for measures designed to remedy their specific problems, in particular agriculture-related ones.

One of the cornerstones of the Azores economy is milk and its related products. Its socio-economic significance and the number of direct and indirect jobs and services it generates make an essential contribution to social and economic cohesion, for which reason EU regional policy must be called upon to underpin the region's economic sustainability and to further the development of the dairy industry. The latter has been affected by the size of the regional milk quota, which is likely to be exceeded, in which case fines will have to be paid under the rules governing the common organisation of the market in dairy products. Such fines, if imposed, would jeopardise the regional economy, which is dependent upon the dairy industry.

In view of the above, and with due regard to Article 299(2) of the Treaty, would the Commission answer the following questions:

Answer given by Mr Fischler on behalf of the Commission

(5 February 2003)

The Community has implemented rural development measures to assist the Azores region for the 2000-2006 period under Regulation (EC) No 1257/1999 (1). They include a multi-fund operational programme part-financed from the Structural Funds, inter alia by the EAGGF Guidance Section (EUR 133 554 million) and a rural development plan part-funded by the EAGGF Guarantee Section (EUR 122 206 millions).

The rural development support granted under those programmes is intended inter alia for improving productive structures, conversion and reorientation of agricultural production, improvement of product quality, sustainable development, diversification of activity, etc. Some of the programmes' measures have already been the subject of specific derogations of a structural nature provided for in Regulation (EC) No 1453/2001 (2).

Rural development measures must in any case be coordinated with other common agricultural policy measures, including measures taken under the common organisation of markets.

More specifically as regards dairy production Article 26 of Regulation (EC) No 1453/2001 provides for the Azores to receive aid for implementing, during the period 2002-2006, a comprehensive programme to support the production and marketing of local produce in the livestock and milk products sector. The authorities responsible are to present draft programmes for approval by the Commission, but to date they have not presented any under this provision.

Milk production in the Azores currently exceeds 500 000 tonnes a year, an increase of almost 60 % in 10 years; such a percentage increase has not been achieved in any other region of Europe. The almost inevitable consequence of this growth, however, is that the price paid to milk producers in the Azores is among the lowest in Europe. Cheese — the main derivative — also sells with difficulty and at prices well below those of comparable continental products, for lack of a sufficient market outside the islands and concerted efforts to develop one, for example under Article 26 of Regulation (EC) No 1453/2001.

The Portuguese authorities have sent the Commission a request to extend Article 23 of Regulation (EC) No 1453/2001, which concerns the setting of milk quotas in the context of determining additional levies. The request is substantiated by reference to the specific characteristics of production in the most remote regions, and in particular of milk production in the Azores.

The Commission is examining the request in the light of the Azores' special situation as a most remote region, while ensuring consistency and respect for the integrity of Community law in the context of the rules applicable, in particular Regulation (EC) No 1453/2001.

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(1)  Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain Regulations, OJ L 160, 26.6.1999.

(2)  Council Regulation (EC) No 1453/2001 of 28 June 2001 introducing specific measures for certain agricultural products for the Azores and Madeira and repealing Regulation (EEC) No 1600/92 (Poseima), OJ L 198, 21.7.2001.

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