COMMON POSITION (EC) No 27/94 adopted by the Council on 11 July 1994 with a view to adopting Council Regulation 94/.../EC of ... establishing a special system of assistance to traditional ACP suppliers of bananas (94/C 232/03)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 130w thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the Economic and Social Committee (2),

Acting in accordance with the procedure laid down in Article 189c of the Treaty (3),

Whereas Protocol 5 on bananas to the Fourth ACP-EEC Convention provides that, in respect of its banana exports to the Community markets, no ACP State shall be placed, as regards access to its traditional markets and its advantages on those markets, in a less favourable situation that in the past or at present;

Whereas national market organizations have hitherto granted traditional ACP suppliers of bananas an outlet for their production on their traditional markets and enabled them to obtain from these markets an adequate income;

Whereas the common organization of the market in bananas established by Regulation (EEC) No 404/93 (4) sets the framework for continuing, on the Community market, the advantages enjoyed by traditional ACP suppliers, in accordance with the Community's commitment set out above;

Whereas risks exist nevertheless that the introduction of a new market organization and the need to adapt to it could jeopardize the continuing viability of ACP supplies;

Whereas particular efforts will be needed to adapt to the new market conditions in order to take advantage of the opportunities offered;

Whereas the structure and the nature of the new market and the marketing efforts necessary to maintain a presence on this market represent new elements some of which neither the traditional ACP suppliers nor the operators handling this procedure could reasonably foresee;

Whereas technical and financial assistance, additional to that provided for in the Fourth ACP-EEC Convention, should therefore be provided to carry out programmes designed to assist producers to adapt to new market conditions and in particular to improve quality, to improve marketing and to improve competitiveness;

Whereas the new conditions prevailing on the market may result in temporary market disturbances, particularly in the sectors of the Community market traditionally supplied by the ACP States;

Whereas such disturbances could seriously affect the income of the ACP States from the market and therefore the continued viability of the production in question;

Whereas financial assistance should therefore be provided to permit the ACP States to remain on the market, until such time as the market stabilizes and a satisfactory economic return from the market can be received;

Whereas income support should be complementary to transfers under the export earnings stabilization system (Stabex) triggered by the same set of circumstances;

Whereas it is therefore appropriate to align calculation of income support with the calculation of Stabex transfers;

Whereas income support is granted each year for the preceding year and therefore this Regulation should apply as from 1 July 1993, the date Regulation (EEC) No 404/93 takes effect,

HAS ADOPTED THIS REGULATION:

Article 1

A special system of assistance to traditional ACP suppliers of bananas is hereby established. This assistance may consist of technical and financial assistance and/or of income support.

Article 2

For the purposes of this Regulation:

- 'traditional ACP suppliers` means the ACP States listed in the Annex,

- 'bananas` means fresh or dried bananas covered by CN code 0803, excepting plantains.

TITLE I Technical and financial assistance

Article 3

1. Technical and financial assistance shall be provided to tranditional ACP suppliers with a view to helping them adapt to the new market conditions following the establishment of a common organization of the market in bananas.

2. This technical and financial assistance shall be provided to contribute to the carrying-out of programmes in the banana sector to achieve one or more of the following objectives:

- to improve quality,

- to adapt production, distribution or marketing methods to meet the quality standards provided for in Article 2 of Regulation (EEC) No 404/93,

- to establish producers' organizations which have as an objective the improvement of the marketing and competitiveness of their products,

- to develop a production and/or marketing strategy to meet the requirements of the market in the Community in the light of the common organization of the market in bananas,

- to assist with training, market intelligence, the development of environmentally sound production methods, improving the distribution infrastructure, improving trade and financial services to banana producers and/or improving competitiveness.

3. Assistance may be given to programmes having similar objectives which are currently financed under the Fourth ACP-EEC Convention or by the public authorities of the Member States parties to that Convention where such assistance would result in more rapid completion of the programme.

Article 4

The Commission shall decide on the eligibility of the programme and the level of assistance after consultation with the traditional ACP supplier concerned. It shall also take into account the consistency of the envisaged programme with the general development objectives of the ACP State concerned and its impact on regional cooperation with other banana producers, in particular the Community producers.

TITLE II Income support

Article 5

1. Within the limits indicated in Article 15 (1) of Regulation (EEC) No 404/93, traditional ACP suppliers shall be eligible for income support.

2. Income support shall be paid where the reduction in income derived from exportation to the Community of bananas complying with the common standards is directly related to conditions prevailing on the market subsequent to the establishment of the common organization of the market in bananas.

Article 6

1. Income support shall be individually calculated for each traditional ACP supplier on the basis of the quantities exported to the Community during the year of application and the difference between the reference price and the actual price.

2. The reference price shall be the average price per tonne of bananas produced in the ACP State concerned and exported to the Community during the six calendar years preceding the entry into force of this Regulation, less the two years with the highest and the lowest figures.

The actual price shall be the average price per tonne of bananas produced in the ACP State concerned and exported to the Community during the envisaged year of application.

3. The statistics needed for the calculation of income support shall be those drawn up and published on Community imports by the Statistical Office of the European Communities.

4. Before 1 July of each year, the Commission shall determine the income suport for the previous year after consultation with the ACP State concerned.

5. Exceptionally, and in particular during the first year of application of this Regulation, advances may be paid where there is a significant reduction in production income compared to that of the previous year or for any given year.

The need for and the level of such advances shall be determined by the Commission after consultation with the ACP State concerned.

TITLE III General provisions

Article 7

1. Financial commitments made under Title I shall be in addition to any funds available for ACP States under the provisions of the Fourth ACP-EEC Convention.

2. Financial commitments made under Title II shall be complementary to funds available under the system guaranteeing the stabilization of export earnings provided for in Articles 186 et seq. of the Fourth ACP-EEC Convention. Title II therefore only entitles to payments of income support as far as transfers, made for identical quantities in accordance with Articles 186 et seq. of the Fourth ACP-EEC Convention, do not entirely offset the effects of price decreases on the income of traditional ACP suppliers.

3. Payments of income support shall be used, in accordance with a framework of mutual obligations to be agreed between the traditional ACP supplier concerned and the Commission in each case, for the benefit of producers adversely affected by the loss of income and be used to enhance the economic viability of production.

4. (a) Where application of Title II gives rise to a transfer basis, the ACP State concerned shall, in the month following receipt of the notification referred to in Article 6 (4), send the Commission a substantial analysis of the sector recording the loss of earnings, the causes of the loss, the policies pursued by the authorities and the projects, programmes or operations to which the resources are to be allocated in accordance with the objectives set out in paragraph 3 hereof.

(b) Projects, programmes or operations to which the recipient ACP State undertake to allocate the transferred resources shall be examined jointly by the Commission and the ACP State concerned.

(c) Resources shall be used to support immediate operations to sustain the economic viability of production, or adjustment operations designed to restructure production and export acitivities, within the framework of any consistent reform policy in the banana sector.

Article 8

1. The granting of assistance as defined in Article 1 shall be subject to the designation by the ACP State concerned of a representative organization entitled to act and to receive payments on its behalf within the framework of this Regulation.

2. The representative organizations shall present the following characteristics:

(a) be composed entirely or mainly of producers of bananas in one or more traditional ACP suppliers;

(b) pursue at least two of the following objectives:

- improvement of the quality of the produce,

- improvement of the quality of the distribution and marketing network,

- improvement of the returns to producers,

- improvement of the role of producers in the organization of the banana market.

3. The representative organization designated in accordance with paragraph 2 must be notified to the Commission.

Article 9

As far as necessary, detailed rules for the application of this Regulation shall be determined by the Commission in accordance with the procedure laid down in Article 10.

Article 10

The Commission shall be assisted by a committee of an advisory nature composed of the representatives of the Member States and chaired by the representative of the Commission.

The representative of the Commission shall submit to the committee a draft of the measures to be taken. The committee shall deliver its opinion on the draft, within a time limit which the chairman may lay down according to the urgency of the matter, if necessary by taking a vote.

The opinion shall be recorded in the minutes; in addition, each Member State shall have the right to ask to have its position recorded in the minutes.

The Commission shall take the utmost account of the opinion delivered by the committee. It shall inform the committee of the manner in which its opinion has been taken into account.

Article 11

This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities.

It shall apply with effect from 1 July 1993. It shall expire on 28 February 1996.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at ...

For the Council

The President

(1) OJ No C 344, 29. 12. 1992, p. 9.

(2) OJ No C 108, 19. 4. 1993, p. 39.

(3) Opinion of the European Parliament of 12 March 1993 (OJ No C 115, 26. 4. 1993, p. 266), Council common position of ... (not yet published in the Official Journal) and Decision of the European Parliament of ... (not yet published in the Official Journal).

(4) OJ No L 47, 25. 2. 1993, p. 1. Regulation amended by Commission Regulation (EC) No 3518/93 (OJ No L 320, 22. 12. 1993, p. 15).

ANNEX

LIST PROVIDED FOR IN THE FIRST INDENT OF ARTICLE 2

Traditional ACP suppliers of bananas

Belize

Cameroon

Cape Verde

Côte d'Ivoire

Dominica

Grenada

Jamaica

Madagascar

Saint Lucia

Saint Vincent and the Grenadines

Somalia

Suriname

STATEMENT OF THE COUNCIL'S REASONS

1. The completion of the internal market on 1 January 1993 made it necessary to introduce common rules for the banana market, which had previously been governed by different rules in the various importing Member States.

2. In August 1992 the Commission submitted to the Council a proposal for a Regulation on the common organization of the market in bananas (Banana CMO). This proposal, adopted by the Council on 26 February 1993 subject to a number of amendments, became applicable on 1 July 1993 (Regulation (EEC) No 404/93) (1).

This market organization lays down provisions relating to common quality and marketing standards (Title I), producers' organizations and concentration mechanisms (Title II), assistance (Title III) and trade with third countries (Title IV).

One of the purposes of the Regulation is, in order that the Community can respect Community preference and its various international obligations, to permit bananas produced in the Community and those from the ACP States which are traditional suppliers to be disposed of on the Community market providing an adequate income for producers and at fair prices for consumers without undermining imports of bananas from other third country suppliers. To this end, the Regulation provides for the opening each year of a tariff quota of two million tonnes for imports of bananas from third countries and non-traditional ACP bananas, subject respectively to a levy of ECU 100 per tonne and to a zero duty.

Traditional imports from ACP States are fixed at 857 700 tonnes, free of duty. In the event abovementioned tariff quota being exceeded, higher duties are applicable in order to permit Community production and traditional quantities from the ACP States to be disposed of on acceptable terms.

3. When it submitted its proposal for the above Regulation, the Commission gave notice that it would subsequently be submitting additional proposals in favour of the ACP States which are traditional suppliers and the banana-producing of countries Latin America.

It sent the Council:

- in December 1992, a proposal for 'a Council Regulation establishing a special system of assistance to traditional ACP suppliers of bananas` (ACP Bananas Regulation), and

- in February 1993, a proposal for a Council Regulation introducing a diversification and development programme for certain banana-producing countries of Latin America.

While the Council's examination of the second of these proposals has not yet been completed, the Council has adopted a common position on the ACP Bananas Regulation.

The Economic and Social Committee delivered its opinion on the Commission proposal on 25 February 1993; the European Parliament approved it on 12 March 1993.

The ACP States were consulted on the Commission proposal and urged its swift adoption.

4. (a) The Banana CMO itself lays down the provisions ensuring the maintenance of the advantages enjoyed by traditional ACP suppliers on the Community market, in accordance with the undertaking made by the Community in the Fourth ACP-EEC Convention. Protocol 5 annexed to that Convention provides that 'in respect of its banana exports to the community markets, no ACP State shall be placed, as regards access to its traditional markets and its advantages on those markets, in a less favourable situation than in the past or at present`.

(b) Since there is a risk, however, that the introduction of the Banana CMO and adaptation to its mechanisms may endanger the future viability of ACP production, the ACP Bananas Regulation is designed to permit the Community to assist traditional ACP suppliers for a transitional period, to enable them to adapt to the new requirements of the banana market and to cope with temporary disturbances which could affect that market. It will be noted that most ACP banana exporters suffer from a number of disadvantages: island location, small plantations, distance markets. The ACP States are also dependent on banana sales as a source of foreign currency and as a major element of their economies. For some of them, this dependence is almost total. Reduced penetration on the Community market or a reduction in income on that market could have an immediate negative impact on these States' prospects for development.

(c) Despite the advantages extended to the ACP States by the Banana CMO, the structure and nature of the Community market, together with the marketing drive required in order to take advantage of the opening provided by that CMO, constitute new elements, some of which could not have been foreseen as consequences of the introduction of the CMO.

The ACP Bananas Regulation therefore provides for financial assistance in addition to that provided for by the Fourth ACP-EEC Convention to be granted to ACP States which submit programmes intended to help their producers adapt to the new market conditions. Particular attention is given to programmes aimed at improving quality, marketing methods and competitiveness.

(d) Furthermore, even though the Banana CMO is designed to ensure that traditional ACP suppliers continue to draw from their activity on the Community market an economic return comparable to that which they received before its entry into force, there is nevertheless a risk that the implementation of the single market may mean a loss of income for ACP suppliers which would have an immediate effect on the ability to survive of small producers or on the capacity of the economy of the ACP States concerned to adapt to the new conditions.

To prevent lasting damage being caused by any distortions which may be experienced for the marketing or their bananas, ACP producers could under the new Regulation receive support to compensate any loss of income directly resulting from the situation observed on the Community market consequent on the introduction of the common market organization.

This income support would be in addition to any transfers which the ACP States may receive under the Fourth Convention's Stabex system. This additional support will, however, only be granted in so far as Stabex transfers fail to eliminate fully the effects of falling prices on producers' income.

5. Note that, in relation to the Commission's original proposal for a Regulation, the common position adopted by the Council contains two amendments of substance, which have been endorsed by the Commission.

The first of these amendments concerns the legal basis, the Regulation now being based on Article 130w of the EC Treaty instead of Article 113 of the EEC Treaty as originally proposed by the Commission.

The second amendment adds certain details regarding the arrangements for granting income support (Article 7).

Note, finally, that Article 11 of the text of the Regulation, regarding the date of entry into force, has been adapted, because the date of 1 January 1993 proposed by the Commission has passed. The arrangement is now as follows:

- date of entry in force of the Regulation: the day of its publication in the Official Journal of the European Communities,

- date from which the Regulation applies; 1 July 1993, being the date on which the Banana CMO became applicable.

(1) OJ No 47, 25.2. 1993.