REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT IN ACCORDANCE WITH ARTICLE 23 OF REGULATION (EEC) No 3763/91 - Report on the progress made in the implementation of POSEIDOM from 1992 to 1998

(presented by the Commission)

INTRODUCTION

1. Economic and Social Situation

2. Implementation of the POSEIDOM agricultural framework Regulation

2.1. Specific supply arrangements

2.1.1. Description of the arrangements:

2.1.2. Comments and analyses

2.2. Aid for agricultural production in the French overseas departments

2.2.1. Livestock production

2.2.2. Crop production

2.2.2.1. Fruit, vegetables, flowers and plants

2.2.2.2. Sugar cane/rum

2.2.2.3. Rice

2.3. Budget

2.4. Other measures

2.4.1. The graphic symbol

2.4.2. Structural derogations

2.4.3. Veterinary and plant health measures

2.4.4. EAGGF Guidance Section measures

3. Conclusions

ANNEX 1 Socio-economic and agricultural data by department

ANNEX 2 Specific supply arrangements (SSA) -- achievements

ANNEX 3 Specific aid for local agricultural products

ANNEX 4 Structural derogations

ANNEX 5 Veterinary and plant health measures

ANNEX 6 EAGGF Guidance Section measures

INTRODUCTION

On 22 December 1989, the Council introduced a programme of options specific to the remote and insular nature of the French overseas departments (POSEIDOM). [1]

[1] Council Decision 89/687/EEC; OJ L 399, 30.12.1989, p. 39.

1. This programme aims to take account, in the application of Community policies, of the overseas departments' special characteristics and handicaps associated with their insularity, remoteness, small size, difficult topography and climate, economic dependence on certain products and restricted and dispersed local markets that affect their economic and social circumstances.

2. For this purpose, the Council adopted a framework Regulation [2] introducing specific measures in respect of certain agricultural products for the benefit of the French overseas departments, to develop or maintain local activities; these measures have been implemented by a large number of Commission implementing regulations. The Regulation was adapted, and the measures extended, by Council Regulation (EC) No 2598/95 of 30 October 1995 [3].

[2] Council Regulation (EEC) No 3763/91, OJ L 356, 24.12.1991, p 1.

[3] OJ L 267, 9.11.1995, p. 1.

3. The common declaration concerning the outermost regions of the Community, annexed to the Treaty on European Union, confirmed the POSEIDOM approach. The Treaty of Amsterdam introduced a new article, Article 299(2), applicable to the outermost regions, establishing the specific framework to be applied by the Community to these regions. The Treaty entered into force on 1 May 1999.

4. Under Article 30(1) of the framework Regulation for agriculture, the Commission must submit an annual report on the progress made in implementing the agricultural section of POSEIDOM accompanied, where appropriate, by proposals for any adjustments needed to achieve the programme's objectives. Under Article 30(2) of that Regulation, at the end of the third year of application of the programme the Commission must submit to Parliament and the Council a general report on the economic situation of the French overseas departments showing the impact of the measures taken under the Regulation.

5. It has been possible to present only one report, that covering the period 1992/93 [4].

[4] COM(94)2000 final of 30.5.1994.

The French authorities have sent the Commission reports on the implementation of the programme as well as some requests for amendments of the Council Regulation.

In the context of SEM 2000, the Commission appointed an external consultant to draw up a report evaluating the agricultural section of the POSEIDOM programme. The consultant examined the achievement of the programme's objectives and proposed some possible improvements.

This report takes stock of the implementation from 1992 to 1998 of Regulation (EEC) No 3763/91, taking account of the experience gained and the impact of the measures implemented.

At present, the agricultural segment of POSEIDOM comprises 28 measures. Most of the measures concern all four overseas departments; some, however, are intended to deal with specific situations in one department or the other.

1. Economic and Social Situation

>TABLE POSITION>

GDP = Gross Domestic Product; UAA = Utilised agricultural area; FAO = final agricultural output

One of the salient features common to the overseas departments is that they lag behind the rest of the EU in economic and social development. They also suffer from production methods and traditions that result in low productivity and low levels of output. All four overseas departments are in tropical areas subject to unstable or even violent weather conditions, but their geographical disparity encourages differences in agricultural produce from one department to another.

"Remoteness" does not refer simply to geographical distance; there is also a "socio-economic remoteness" affecting supply costs, conditions of production and local price formation, and thus conditions of competition between local products and imports from the rest of the Union and from neighbouring developing countries. This factor results from the size of the local population, and is directly related to the volume of supply and thus purchasing costs. It affects infrastructure.

Annex 1 summarises the main relevant economic and agricultural data for each French overseas department.

2. Implementation of the POSEIDOM agricultural framework Regulation

2.1. Specific supply arrangements

The objective of the specific supply arrangements is to compensate for the additional costs of supplying agricultural products to the overseas departments, due to their insularity and remoteness. The arrangements were designed as an instrument to ensure the development of local production and processing activity, by reducing the cost of inputs, with a view to supplying local consumption needs.

2.1.1. Description of the arrangements:

-Forecast supply balances are drawn up each year for the agricultural products mentioned in the Regulation, which are essential as animal feed or for human consumption, and for local processing. These balances may be revised in the course of the year as a function of needs in the overseas departments.

-Since the objective of lowering prices for the end user is to be achieved by promoting competition between sources of supply, products imported from non-member countries under the specific supply arrangements are exempt from customs duties and the same Community products are subsidised at a rate equivalent to the advantage resulting from this exemption. The measure should avoid distorting traditional trade flows and safeguard the Community's share of supply.

-Special attention is paid to the economic effects of these arrangements, in particular as regards actual spinoff through to the end-user. Products imported under the specific supply arrangements may not be re-exported or re-dispatched to the rest of the Community, although this does not prejudice existing trade-flows between overseas departments. Where processing takes place in the overseas departments, the restriction does not apply to traditional consignments or exports. In this case, no refund is granted.

It is left up to the Member State to take all appropriate measures to check that the benefits of the arrangements are actually passed on. It is specified that this may involve assessing the trading margins of the various traders concerned. A local POSEIDOM committee is set up in each department, under the authority of the Prefect, to carry out regular examinations of the development of product prices and to assess the impact of the measures taken pursuant to the rules. To ensure that the benefit is passed on, security must be lodged; it is released after checks, which are made at various stages up to that of sale to farmers, or in the industrial sectors in receipt of aid.

2.1.2. Comments and analyses

In the period 1992-97, expenditure under the SSA accounted on average for 46.6% of POSEIDOM expenditure (not including revenue forgone as a result of the customs duty exemptions).

The operation of the SSA gives rise to a number of comments and analyses. The main statistics on implementation of the supply balances can be found in the Annex 2.

Supplies of cereals, cereal products and other plant products to the overseas departments accounted for 96% of SSA expenditure, mainly wheat (31.5%), maize (55.2%) and barley (7.9%).

For cereals, the measure provides that direct imports into the overseas departments shall be exempt from customs duties as follows:

-when intended as animal feed: cereals originating in developing countries;

-when intended for human consumption: cereals originating in overseas countries and territories and ACP countries.

Where exceptional difficulties arise, the exemption for cereals intended as animal feed may be extended to products from other third countries, and that for cereals intended for human consumption, to products originating in developing countries.

The implementation of the reform of the CAP and the signing of the GATT agreements (Uruguay Round) led to a decrease in import duties on the products, and a gradual closing of the gap between world and Community prices. Consequently, since Community aid is calculated as a function of the difference between these two price levels, the amount of aid has dwindled to nothing (1995/96) for certain cereals, which has made third-country supplies of maize very attractive. In the circumstances, it is possible and worthwhile to charter vessels.

This development has given rise to concern about the objective of offsetting extra cost so as to cut production costs.

Within the constraints of the present rules, the Commission has carefully managed the effects induced by these changes in the international environment. It has also launched external evaluations under SEM 2000 to assess the real difficulties of applying the SSA, and to prepare the Commission's reports to the Council and to Parliament on the implementation of these arrangements.

The external assessment report on the agricultural aspects of POSEIDOM concludes that, in view of the new situation in the market, the resources provided under Council Regulation (EEC) No 3763/91 are not always sufficient to achieve the principal objective of the SSA, which is to compensate for additional supply costs in these regions. Objective criteria are not available to quantify the remoteness and insularity of these regions: the present method of calculating aid for Community products fails to cover the extra cost of supply.

The supply of other plant products to the overseas departments has been very small (barley malt, hops, durum wheat groats and meal, seed potatoes, vegetable oils, fruit pulp and purée and concentrated fruit juice).

The supply of breeding animals to the overseas departments has accounted for 3% of total SSA expenditure.

To support livestock farming in the overseas departments, with a view to satisfying consumption needs, aid is provided for supply from the Community of pure-bred breeding animals: bovine animals, swine, sheep, goats, horses, rabbits, multiplier or breeding chicks and hatching eggs for the production of multiplier or breeding chicks.

As a rule, Réunion has made most use of this measure, because it has a more highly developed and organised livestock sector than the other overseas departments. The livestock sector in Guadeloupe has been facing serious problems of organisation since the main cooperatives were wound up by the courts. Isolated livestock farmers in Martinique and Guadeloupe are now once again starting to apply for aid, although they would like procedures to be simplified. The measure is clearly unsuitable for implementation in French Guiana, where breeders are most interested in West Indian breeds, which are not eligible for aid.

Users find the level of aid inadequate in view of the new constraints introduced by the legislation on animal welfare and of real transport costs.

The impact of the measures has been positive in terms of genetic improvement of the herds concerned.

Import into Réunion of wheat bran from ACP countries

Within the limit of an annual quantity of 8 000 tonnes, no levy is applied to this wheat by-product, which is used as an ingredient in certain types of animal feed (in particular for pigs, bovine animals and rabbits), and which local mills do not produce in sufficient quantity to satisfy demand. Utilisation of the measure has been satisfactory, with a take-up rate of 76%, not counting the first year.

All imported bran is from Mauritius (indeed, the measure was designed in the light of relations between the two islands), as transport costs from the other ACP countries are prohibitive since their industries are not equipped for "pelleting" and bulk loading. The development of cattle-farming in Mauritius might eventually lead to supply problems.

In order to support traditional stockbreeding activities and to use available forage and slaughtering and packing facilities to the best advantage, Article 7 of Council Regulation (EEC) No 3763/91 provided for a specific temporary measure for import or supply of bovine animals for fattening purposes. This measure was originally introduced for the period 1991/92 to 1994/95, but was extended for two further marketing years by Regulation (EC) No 2598/95 of 30 October 1995. It expired in June 1997.

As Guadeloupe and Martinique did not request application of the measure, only French Guiana and Réunion were concerned. Only one operation was carried out, involving the supply of 72 animals of EU origin to French Guiana in 1992; no other application has been received.

In economic terms, it appears that SSA aid is generally taken into account in price forming. The technique used by the French authorities is to examine gross margins in industry.

Operation of the arrangements raised some problems, particularly a discrepancy between forecasts and actual requirements for some balances. These discrepancies arose because of incomplete statistics (which did not take account of certain commercial transactions between metropolitan France and the overseas departments), and some administrative teething troubles. These difficulties have been corrected, but the procedural rules provided for in Commission Regulation (EC) No 131/92 [5] need to be amended.

[5] OJ L 15, 22.1.1992, p. 13.

2.2. Aid for agricultural production in the French overseas departments

Under the POSEIDOM programme, aid is to be granted for the production, processing and marketing of agricultural products, in order both to maintain and strengthen traditional activities and to develop diversification. In certain cases, this aid is supplemented by the impact on animal feed and on breeding animals of the aid under the supply arrangements.

From 1992 to 1997, this aid represented 53.4% of total expenditure, broken down as follows: livestock farming: 14%; fruit, vegetables, flowers and plants: 11%; sugar cane/rum: 69%; rice in French Guiana: 6%.

2.2.1. Livestock production

For livestock farming in the beef and veal sector, POSEIDOM (Article 5) introduces aid to help develop traditional overseas department livestock products, within the limits of the local consumption requirements (which are assessed in the context of a periodic supply balance). In addition to the supply of pure-bred breeding animals, as already mentioned, a supplement of EUR 48.3 per head is granted on top of the fattening aid for male bovines and the premium for maintaining suckler cows available under Regulation (EEC) No 1357/80.

Council Regulation (EC) No 2598/95 of 30 October 1995 adapts this measure to the specific situation in the French overseas departments. Provisions relating to density, the regional ceiling and the individual ceiling for animals held on the farm do not apply in the overseas departments.

The premium for maintaining suckler cows, along with the special additional premium, is granted each year for up to 35 000 suckler cows (females that have already calved), a ceiling that can be revised as a function of the development of consumption needs in the French overseas departments. Implementation of the measure is summarised in Table 1 in Annex 3.

The number of animals subsidised has increased steadily by about 43% over the period. Despite this favourable development, the low rate of identification of the herd in the overseas departments means that not all animals eligible for the premium are actually subsidised. The number of animals subsidised is below the ceiling fixed by the Council. However, the introduction of basic premiums supplemented by the additional POSEIDOM premium has helped to improve the rate of identification and information about the herd, leading to better traceability to slaughter, and effective preventive measures. This is a factor in quality enhancement.

The special premium for male bovine animals is granted each year for up to 10 000 animals, a flat-rate ceiling that can be revised as a function of need. Implementation of the measure is summarised in Table 2 in Annex 3.

There has been an overall increase in the number of animals subsidised, although with annual fluctuations depending on dates of declaration and dates of calving (early or late), but the assisted population is still below the ceiling fixed. A considerable increase was recorded in Réunion, which now accounts for half the subsidised animals. The aid encourages the slaughter of heavier animals, to cope with competition from imported meat.

In the beef and veal sector, these two measures have boosted livestock-farmers' incomes and enabled them to cope better with the development problems facing the sector in the specific situation of the overseas departments.

Aid for the human consumption of locally-produced fresh cows' milk products, paid to dairies, is provided for in Council Regulation (EEC) No 3763/91. This measure, targeted on consumers rather than producers, has never been implemented.

Council Regulation (EC) No 2598/95 replaces this scheme with aid for the development of local production of cow's milk for human consumption, with a grant to producers of EUR 8.45 per 100 kg of whole milk. Aid is paid through the dairies, up to a limit of 20 000 tonnes per marketing year for all the overseas departments. Implementation of the measure is summarised in Table 3 in Annex 3.

This measure has encouraged professionalisation and the expansion of milk collection in the overseas departments, leading to the development of processing downstream and covering some local needs; this is especially true in Réunion, where output doubled from 1992 to 1997. The 20 000 t limit on the payment of aid will be reached in 2000 for the first time. However, local production covers only a small share of local consumption. Article 6 provides for possible revision of the maximum quantity.

To support production and marketing of local produce in the livestock sector, Article 9a (added by Council Regulation (EC) No 2598/95) provides for aid to be granted annually in the five-year period from 1996 to 2000 to implement regional programmes in Martinique and Réunion. The programmes may include measures to improve quality and hygiene, the promotion of quality products, the establishment of intermediate stages, rationalisation of production and marketing structures and the provision of technical assistance.

Aid granted replaces the resources previously available to interbranch organisations in the sectors concerned in the overseas departments. Those resources were based on contributions on imports regarded as incompatible with Community rules.

The interbranch organisations draw up a draft annual programme, in collaboration with the national authorities, which is presented to the Commission each year. The Commission decides whether to approve the programme. Implementation of the measure is summarised in Table 4 in Annex 3.

The measure has more impact if it is based on structured sectors, and if farmers are sufficiently well motivated to pursue the objectives of modernisation and spatial planning (Réunion) or professionalisation (Martinique). It makes possible proper organisation of local stockholdings, so as to boost the development of production by the modern sector, i.e. the farmers who subscribe to a quality approach.

2.2.2. Crop production

2.2.2.1. Fruit, vegetables, flowers and plants

In the fruit and vegetables, flowers and live plants sector (but excluding bananas), Article 13 of Council Regulation (EEC) No 3763/91 provided for aid per hectare to be granted to producers who undertook a programme of initiatives with a view to the development of suitable and effective production methods and the improvement of product quality over an area of at least 0.5 ha. The maximum amount of aid was EUR 500 if public funding from the Member State amounted to at least EUR 300 and the producers' financing to at least EUR 200. Moreover, these initiatives should be covered by programmes designed to run for at least three years. Implementation procedures are bureaucratic, and the structure and amounts of aid have not had the hoped for incentive effect. The measure was discontinued when the agricultural provisions of POSEIDOM were revised in October 1995.

To obtain a clearer view of the real potential of the processed fruit and vegetables sector in the overseas departments, Article 14 of Council Regulation (EEC) No 3763/91 provided for a contribution of up to EUR 200 000 towards the financing of an economic analysis and forward study of the industry. The study was to produce an economic and technical assessment of the sector, and to examine conditions and scope for development.

The report proposed: reinforcing the competitiveness of local production to compete with imports when the local market is promising; developing exports of products that already have a good image; diversifying products, and creating local demand for new products to be developed.

As a result of this study, measures were taken in favour of the sector and included in the revised Regulation of 1995.

The SSA were extended to cover fruit pulps, purées and concentrated juices other than those qualifying for the aid provided for in Article 14.

Council Regulation (EC) No 2598/95 amended the original Article 13, introducing aid for the marketing of local products for the exclusive supply of the markets of the overseas departments. The aid is paid to producers, and is granted in respect of fruit (except bananas), vegetables, flowers and live plants, peppers, pimentos and spices, within the limits of annual quantities established for each product category.

The aid is granted subject to the conclusion of supply contracts lasting one or more years between producers and distributors, restaurants and the like, or local authorities. Where supply needs so justify, the aid may be paid for supply in a department other than that in which the product was harvested.

The amount of aid, fixed on a flat-rate basis by category of product, may be increased by 5% for contracts concluded by recognised producers' organisations or groups. Implementation of the measure is summarised in Table 5 in Annex 3.

The loose structure of the sector hampers a rapid response to demand, in particular demand from supermarkets and hypermarkets, which require regular supplies of standard quality (which encourages the use of external suppliers). Although the measure was not introduced until mid-1997, the number of applications lodged shows how much interest it has aroused (see Table 6 in Annex 3).

Council Regulation (EC) No 2598/95 provides for aid of EUR 6.04 per kilogram for the production of green vanilla used to produce dried vanilla, up to an annual quantity of 75 tonnes.

Only one department, Réunion, has so far utilised the measure. The sector is in difficulties: the output of green vanilla dropped from 150 tonnes in 1984 to 18 tonnes in 1995, which compromised the existence of processing and marketing plant.

The introduction of the POSEIDOM aid scheme enabled the purchase price to be increased, and encouraged producers: in 1995, output rose to 25 tonnes; in 1997, 48.5 tonnes were processed. However, tonnages were smaller in 1998, owing to the plants' growing cycle, with a smaller harvest inevitably following the high yield of 1997.

Council Regulation (EC) No 2598/95 provides for aid amounting to EUR 44.68 per kilogram to be paid out for the production of essential geranium and vetiver oils, up to an annual maximum of 30 tonnes in the case of the former and 5 tonnes in the case of the latter. These products are at present specific to Réunion, the only region in receipt of aid under this scheme.

These two sectors have declined considerably: at present there are only about 400 geranium producers, compared with 1300 in 1992; output of essential vetiver oil declined from 12 tonnes in 1985 to under one tonne in 1995. Tonnages produced are shown in Table 7 in Annex 3.

The implementation of this measure aroused renewed interest among producers, and various measures have been planned to relaunch these traditional activities.

Aid for the production of processed fruit and vegetables obtained from products harvested in the overseas departments was introduced from 1 July 1998 (Article 14). The aid is paid to processors who have paid producers not less than a minimum price for their raw materials. The minimum price is fixed by the Member State on the basis of the production costs involved.

The amount of aid is fixed on a flat-rate basis for each of the product categories, by reference to the prices of the local raw materials used and the import prices for the same raw materials. The aid is paid out within the limits of maximum annual quantities established for each product category. Implementation of the measure is summarised in Table 8 in Annex 3.

Under Article 15 of Council Regulation (EEC) No 3763/91, aid is granted for products harvested in the overseas departments to be marketed in the rest of the Community, where competition is very strong (ACP countries, GSP), especially for flowers, fruit and vegetables.

The aid is subject to the conclusion of annual contracts between individual producers or producer groups or associations, and operators established in the rest of the Community, up to a limit of a volume of trade of 3 000 tonnes per product per year and per department. The aid, granted to the purchaser, amounts to 10% of the value of the produce marketed, free at destination (13% for joint ventures valid for at least three years between producers and traders).

The products concerned are fruit (except bananas), vegetables, flowers and live plants. Article 15 was amended by Council Regulation (EEC) No 2598/95 to extend the aid to products processed from fruit or vegetables harvested in the overseas departments, essential geranium and vetiver oils, dried vanilla and vanilla extracts.

In respect of melons, aid may be granted in a department for a quantity exceeding 3 000 tonnes provided that the total volume eligible for aid for all the departments is not exceeded.

The financial balance by product, for the overseas departments taken together (average for 1995, 1996 and 1997) shows that melons are at present the only product with a properly organised marketing structure; in the other sectors, the scope of the aid is still restricted to a few products for somewhat limited volumes. The total volume for the three years was 14 557.16 tonnes, broken down as follows:

>TABLE POSITION>

However, the measure has encouraged metropolitan importers to take an interest in the products of the overseas departments, and has contributed to the establishment of new channels of trade. The extension of the aid to processed fruit and vegetables should give the measure new impetus, especially for fruit juice and jam.

2.2.2.2. Sugar cane/rum

There are three measures in favour of the sugar cane and rum sector.

Flat-rate aid per hectare for cane growing is paid to individual planters, planter groups or associations of planters, under a restructuring plan presented by France. The plan is intended to achieve the improvement of plantations and the development of mechanisation. The Community finances the aid at a rate of 60% of eligible expenditure, where the official contribution of the Member State is at least 15%, the Community aid being reduced accordingly where the contribution is less.

Commission Regulation (EEC) No 1487/92 of 9 June 1992 lays down the implementing arrangements for this measure, and in particular defines eligible works. The total area covered was 27 400 hectares, and the restructuring plan was to be carried out over a minimum of three and a maximum of seven years starting on 1 January 1992.

Two flat-rate aid schemes were defined: aid for planting, amounting to EUR 750 per hectare, involving 27 400 hectares; and aid for land improvement, amounting to EUR 1 747 per hectare, involving 9 850 hectares. The land improvement aid was granted only for works carried out on plots on which there followed the planting of sugar cane eligible for planting aid.

The purpose of planting aid was to reduce the investment cost of planting, and to bring down the average age of the crop. New planting provides an opportunity to introduce technical improvements (use of new varieties, improvement in soil fertility, etc.). The improvement in the rate of new planting has led to an increase in average yields.

Land improvement work has mainly consisted in the removal of large stones, to enable manually cut cane to be mechanically loaded, and the removal of small stones, to enable the mechanical cutter to be used. These works have therefore helped to cut production costs.

The measure worked very well, although it took longer than expected to implement. France requested an extension in December 1996. Consequently, in December 1997, the Commission adopted a complementary three-year programme for 16 423 hectares of new planting and 8 875 hectares of land improvement from 1 April 1997 to 31 December 1999. Implementation of the measure is summarised in Table 9 in Annex 3. Almost 80% of the area under sugar cane in Guadeloupe was replanted, 70% in Martinique and 50% in Réunion. Yields improved by 10% in Réunion, 8% in Martinique and 20% in Guadeloupe.

Under Article 18 of Council Regulation (EEC) No 3763/91, aid for the processing of sugar cane into agricultural rum is paid to distillers who have paid to the sugar cane producer a minimum price to be determined. This aid is granted up to the limit of an overall quantity corresponding to the average quantity of agricultural rum sold during the three marketing years 1987/88, 1988/89 and 1989/90.

Commission Regulation (EEC) No 1488/92 of 9 June 1992 defines the conditions for granting this aid, and fixes an overall quantity of 75 600 hectolitres of agricultural rum, expressed in pure alcohol, allocated between the four departments. Following the adoption of Council Regulation (EC) No 2598/95, Commission Regulation (EC) No 59/97 of 16 January 1997 changed the amount of aid to EUR 64.22 per hectolitre of pure alcohol, without changing the overall annual quantity. The measure has not been utilised to the same extent in all departments: Réunion has never taken up any of its allocation of 393 hectolitres, while the other departments, and especially Guadeloupe and French Guiana, have used the whole volume allocated. Implementation of the measure is summarised in Table 10 in Annex 3.

The measure has enabled distilleries, threatened by competition from neighbouring countries were sugar-cane prices are lower, to remain in business and has improved production conditions and the quality of the rum produced (in Martinique, a controlled designation of origin has been introduced). Distillery closures, which were frequent until 1992, stopped when the measure was introduced.

Council Regulation (EC) No 2598/95 introduced aid for the direct processing of sugar cane into sugar syrup. The aid is paid to manufacturers up to the limit of an annual maximum quantity of 250 tonnes. The amount (EUR 9 per 100 kg of sugar expressed as white sugar) and conditions of application of the aid were fixed by Commission Regulation (EC) No 59/97 of 16 January 1997. This measure has not yet been applied.

2.2.2.3. Rice

Two measures have been introduced to encourage rice growing and marketing in French Guiana.

Aid for rice production in French Guiana was introduced by Article 3(2). The amount of this flat-rate aid per hectare is fixed with particular reference to soil preparation costs. The aid was granted during the marketing years from 1991/92 to 1995/96. Differentiated rates of aid were granted for three categories, from EUR 348 per hectare to EUR 1 052 per hectare, reflecting the conditions of cultivation and the extent of soil preparation work (especially removal of the unproductive top layer, which varies in depth from one area to another).

This measure expired in 1996. It played a major role, and enabled large-scale rice-growing to get under way in French Guiana, with 4 900 hectares brought into production, or about 88% of the area initially expected (the whole area could not be brought under cultivation within the time laid down in the Regulation).

Aid for the marketing of rice from French Guiana was introduced by Article 3(3).

The measure was originally intended to assist with disposal and marketing in Guadeloupe and Martinique, within the limit of an annual volume of 8 000 tonnes of wholly-milled rice equivalent.

Council Regulation (EC) No 2598/95 reinforced the measure by proposing the extension of the aid to cover the disposal and marketing of rice in the rest of the Community, within the limit of an annual volume of 4 000 tonnes, thus increasing the overall limit to 12 000 tonnes.

Aid is paid to the purchaser who markets the rice harvested in French Guiana, under annual contracts. The amount of the aid is 10% of the value of the marketed produce; that percentage is raised to 13% if the contractor for the producers is a producer group or association thereof.

Most of the contracts for rice marketed in the West Indies are with Guadeloupe, where there is a major milling plant. On average, 60% of the available quota is taken up (the best take-up having been recorded in 1995). Implementation of the measure is summarised in Table 11 in Annex 3. Rice marketed in the rest of the Community (the whole quota) accounts for 2/3 of output.

The is an essential measure to ensure the competitiveness and indeed the continued existence of the rice sector in French Guiana, in view of the lack of storage facilities locally.

2.3. Budget

Specific budget headings have been introduced in the Community budget for financing the agricultural section of POSEIDOM. The corresponding forecasts and implementation are set out in Table 12 in Annex 3.

The revenue to the Community budget forgone as a result of exemption from customs duties for products imported from non-member countries under the specific supply arrangements should also be counted in addition to EAGGF Guarantee Section expenditure.

According to the available information supplied by the French authorities over the period 1992-97, expenditure under the SSA amounted to FRF 506 million from the budget, to which should be added FRF 178 million in revenue forgone as a result of exemption from customs duties (approximate estimate) for wheat bran from 1992 to 1997 for Réunion and for maize from 1994 to 1997.

The following conclusions can be drawn from this information:

-the specific supply arrangements represent around 55% of the average overall cost of the programme for the period concerned (including revenue forgone as a result of exemption from duty), and the agricultural measures around 45% (with figures of 40% and 60% respectively in terms of expenditure alone, i.e. not taking account of revenue forgone);

-owing to the reduction in the amount of aid for Community products, expenditure under the SSA has declined; however, the decline was offset by the increase in revenue forgone as a result of exemption from duties for products imported from non-member countries;

-the cost of measures to support local production has broadly stabilised at about EUR 20 million;

-the total cost of the system set up in 1992 stabilised at about EUR 35 million on average over the period 1993-99;

-the appropriation in the EAGGF Guarantee Section budget has always exceeded expenditure. This gap reflected the difficulty of adopting supply balances that corresponded to real local requirements at a time when the agricultural production aid measures were being launched and picking up speed. All measures have now reached cruising speed and stabilised; however, adjusting some of these measures better to the regional situation would mean an increase in expenditure.

2.4. Other measures

2.4.1. The graphic symbol

To stimulate greater awareness and consumption of products specific to the most remote regions, the "POSEI" programmes provide for the introduction of a graphic symbol, for which the Commission launched a competition in December 1993. The logo was chosen in 1994, and its conditions of use are laid down in Commission Regulation (EC) No 1418/96 [6]. In 1998 the Commission launched a promotion campaign for this logo, to publicise its existence and significance, and the advantages of using it.

[6] Commission Regulation (EC) No 1418/96, OJ L 182, 23.7.1996, p. 9.

2.4.2. Structural derogations

Article 21 provided for derogations from the provisions on improving the efficiency of agricultural structures and on improving the processing and marketing conditions for agricultural and forestry products.

This Article was deleted by the new rural development Regulation (EC) No 1257/1999 (see Annex 4 for details). Only Recital (53) of the rural development Regulation refers to the specific requirements of these regions, but there is no operative part in the text of the Regulation. The requests for flexibility, adjustments or derogations and the proposed solutions should be studied at the time of the review provided for in the programming exercise.

2.4.3. Veterinary and plant health measures

Article 10(1) of Council Regulation (EEC) No 3763/91 amended Article 24 of Council Decision 90/424/EC on expenditure in the veterinary field.

Article 11 of Regulation (EEC) No 3763/91 provided that the Community shall contribute to financing annual programmes for the control of organisms harmful to plants or plant products.

See Annex 5 for details.

2.4.4. EAGGF Guidance Section measures

Guidance Section funding is not included in the scope of this report but is outlined in Annex 6 to give a comprehensive list of all Community measures in favour of agriculture in the French overseas departments.

3. Conclusions

Agricultural measures which are innovative and adapted to the local situation are a major aspect of the Programmes of specific orientations for remote and insular regions. Altogether, these measures have helped to offset some of the constraints affecting production costs. Alongside support from the CAP, they have helped to improve the quality or increase the volume of local output.

The difficulties encountered in implementing some of the measures, and an analysis of the French authorities' requests to the Commission suggest certain adjustments. Some amendments can be made by the Commission while others will require the Council to adapt the POSEIDOM agricultural framework Regulation.

The Commission intends, following on from this report, to propose a Council Regulation, with three aims:

-to adapt the specific supply arrangements more closely to the aims pursued in the light of the changes in requirements noted in the regions and of the present situation,

-to adapt the measures in the light of experience, so as to enhance their effectiveness and their incentive effect,

-to implement new measures to take account of specific local conditions and requirements, within the framework of the POSEIDOM objectives.

ANNEX 1 Socio-economic and agricultural data by department

Guadeloupe

The overseas department of Guadeloupe is an archipelago of 1 705 km in the Lesser Antilles island chain in the Caribbean Sea, over 6 700 km from metropolitan France, made up of eight islands: Guadeloupe (comprising Basse-Terre and Grande-Terre, which are separated by a narrow channel), covering an area of 1 438 km , and the neighbouring islands of La Désirade, the Saintes, Marie-Galante, and, further north, Saint Barthélémy and the French part of Saint Martin.

The climate of Guadeloupe is tropical, tempered by maritime influences and the Trade Winds. The average annual temperature is 25°C, with intermittent rainfall concentrated in September and October.

The population of Guadeloupe is 428 000, with a density of 250 to the square kilometre and an annual population growth rate of 1.5 per thousand, the lowest in the four overseas departments. Unemployment is 27%.

Per capital GDP is 41% of the Community average (the lowest in the overseas departments).

GDP breaks down as follows:

-primary sector 9%,

-secondary sector 20%,

-tertiary sector 71%.

Guadeloupe runs external trade deficits not only on foreign trade, but also on trade with metropolitan France, and on trade with the rest of the Community:

GUADELOUPE'S EXTERNAL TRADE IN 1996

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Guadeloupe's main exports are sugar, bananas and rum, and it is visited by almost 675 000 tourists each year; it must import foodstuffs, industrial products and energy.

Prices are higher than in metropolitan France; in particular, the index of food prices is 28% higher.

Agriculture accounts for 6.6% of the total labour force.

The farm sector uses 50 000 hectares, or 30% of the land area; 47% of UAA is cultivated. There are 11 900 holdings, 86% of which have less than 5 hectares. with an average of 4.2 ha of UAA per holding.

Final agricultural output, amounting to about FRF 1 500 million in 1998, mainly consists in crop products (78%).

The mainstay of the department's farm economy is the banana (28% of FAO), which is also the main export in volume terms, accounting for some 79 000 tonnes. It is estimated that banana-growing covers 5 750 hectares, or 11% of the total utilisable agricultural area of Guadeloupe. Some 700 holdings, accounting for 6% of the total number of holdings, concentrate on banana production.

Sugar cane cultivation covers a much larger area: some 12 900 hectares, or 26% of UAA; it is the second most important agricultural activity in the department, accounting for 14% of FAO, with 90% of output being processed into sugar. The major social importance of the sugar cane sector is clear from the number of holdings involved: 4 400 holdings, or 37% of all agricultural holdings in the department.

Other crops are marginal, despite attempts to diversify. Horticulture occupied almost 3 900 hectares. Fruit production is inadequate as a whole to meet demand. Melons are the only fruit that can be competitive on external markets, because they are produced in the winter. Flowers are mainly grown for cutting.

Martinique

Martinique is the smallest of the overseas departments, with a surface area of 1 100km . It is situated about 6 800 km from metropolitan France, in the Lesser Antilles chain of islands in the Caribbean Sea.

The island is of volcanic origin, and is dominated by Mount Pelée (1 397 m), an active volcano whose catastrophic eruption in 1902 destroyed the major town of Saint-Pierre, killing an estimated 30 000 people, an event that has marked Martinique's history.

The climate of Martinique is tropical, tempered by maritime influences and the Trade Winds. The average annual temperature is 25°C, with intermittent rainfall concentrated in September and October.

Martinique has a population of 395 000, with a density of 360 inhabitants per square kilometre (the highest in the overseas departments). The annual average rate of increase of the population is 0.86%. The constraints on the productive sector combine with strong demographic pressure to hamper the labour market, where the rate of unemployment is 27%.

Per capita GDP is 54% of the Community average. This is the highest per capita GDP in the overseas departments.

GDP breaks down as follows:

-primary sector 6%,

-secondary sector 21%,

-tertiary sector 73%.

The tertiary sector is predominant, with tourism accounting for a major share.

There is a major imbalance between imports (raw materials, food products, industrial products) and exports:

MARTINIQUE'S EXTERNAL TRADE IN 1996

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Martinique's main exports are agricultural, consisting in bananas, rum, pineapples and melons; this confirms the relative importance of the primary sector, in view of the activities it generates.

The index of food prices is 23% higher than in metropolitan France.

The utilisable agricultural area of 33 300 hectares accounts for 31% of the land area of the department; arable land occupies 21 600 ha, or 64% of UAA.

The primary sector is the main source of export revenue for the island, and provides jobs for 7% of the labour force. There are 5 400 holdings, 80% of which have less than 5 hectares. Average utilisable agricultural area per holding is 6.2 hectares.

Final agricultural output, amounting to about FRF 2 000 million in 1998, mainly consists in crop products. Martinique is the overseas department where the value of agricultural output has increased most, mainly because of banana production.

The main products are bananas and rum. The banana, with 11 000 hectares cultivated (33% of the UAA) and 900 holdings (17% of the total number) is the main agricultural produce and the main economic resource of the island. It accounts for 54% of final agricultural output and provides jobs for 80% of the agricultural labour force. With exported output of 242 000 tonnes in 1998, it is Martinique's most important agricultural export (in value terms), generating 40% of export revenue.

Sugar cane is grown over an area of 3 100 hectares (9% of the UAA), with an output of about 190000 tonnes. Rum and sugar account for approximately equal tonnages, sugar production having declined by over 70% since the 1980s. Rum accounts for 8% of Martinique's export revenue, and its production is a basic industry. A controlled designation of origin was created at the end of 1996.

The other agricultural products exported are fresh melons and preserved pineapples.

French Guiana

French Guiana, situated in the north-east of South America, between Suriname and Brazil, 7 500 km from metropolitan France, is the largest and most densely wooded French department: 94% of its 84 000 km area is covered by Amazonian forest.

The climate of French Guiana is equatorial, with humidity of about 90%. Temperatures average 27°C, and rainfall is heavy.

The population of French Guiana totals 160 000 (a density of less than 2 per square kilometre). The population growth rate is the highest of all French departments (23.7 per thousand), and the population is young (over half the inhabitants are aged under 25).

Unemployment is 19%, and per capita GDP 49.5% of the Community average.

GDP breaks down as follows:

-primary sector 10.0%,

-secondary sector 26.5%,

-tertiary sector 63.5%.

The economy was given a considerable boost when the Guiana Space Centre was set up in 1964: the base at Kourou is a major contributor to the economy of French Guiana. Crop and livestock farming depend on the land recovered from the forest and put under cultivation. They have developed gradually over recent years, with rice as the main crop.

The trade balance shows a deficit.

FRENCH GUIANA'S EXTERNAL TRADE IN 1996 (excluding business relating to the space centre)

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The department, characterised by large tracts of forest land, is seeking to develop its assets. Its eight million hectares of forest enable it to export a large volume of processed and unprocessed timber. The second most important business is fishing, practised on an industrial scale and on a smaller scale over the 300 km of coast; the main fisheries product is the shrimp, with a few other species sold for export on regional markets (Cayenne is the fourth largest French fishing port).

The price level is the highest in all four overseas departments: a general index of 120, and a food price index of 145.

Only 0.3% of the territory of French Guiana, or 24 300 hectares, is utilisable agricultural area, 30% of which is arable land.

Farm workers account for 9% of the labour force, and French Guiana is the only overseas department where the agricultural population is increasing.

There are 4 500 holdings, 90% of which have less than 5 hectares, the average size per holding being 5.7 hectares of UAA; this highlights the dual structure (large number of small holdings, and a few very large holdings).

Final agricultural output, amounting to about FRF 600 million in 1998, mainly consists in crop products (87%).

The main activity is rice growing (12% of FAO), providing two harvests a year, and covering 9 000 hectares (37.5% of UAA) altogether for the two growing cycles. Rice output amounts to about 28 000 tonnes per year, with exports valued at almost FRF 50 million.

Réunion

The island of Réunion, 800 km to the east of Madagascar and 9 000 km from metropolitan France, is part of the Mascarene group along with Mauritius and Rodriguez. The island has many assets, including its varied ethnic population, its flora and fauna and its pivotal position in the south-western Indian Ocean.

The island covers an area of 2 500 km , and is composed of two extremely rugged volcanic massifs: the highest point is Le Piton des Neiges (3 069 metres).

The climate is tropical, influenced by the Trade Winds and highly variable with the locality and altitude. The average temperature is 20°C on the coast and 14°C on the inland plain, with night frosts at altitudes above 2 000 m. The cyclone season lasts from December to April. Vegetation varies with the altitude and climate, from tropical forest to dry savannah.

Réunion has the largest population of all the overseas departments. It has 697 000 inhabitants (a density of 280 per square kilometre), 40% of whom are aged under 20; the birth rate is quite high, at 1.5%. The rate of unemployment is the highest in the overseas departments, at 37%.

Per capita GDP is 46% of the Community average.

GDP breaks down as follows:

-primary sector 4%,

-secondary sector 27%,

-tertiary sector 69%.

The trade balance shows a deficit.

RÉUNION'S EXTERNAL TRADE IN 1996

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The main resources are agriculture and fisheries. Réunion's main export is sugar, and its imports (largely from the Community) are food, machinery, minerals, and energy and transport equipment. Tourism is a developing sector.

Prices are higher than in metropolitan France: +16% on the general price index, and +30% on the food price index.

An area of 46 000 hectares, or 18% of the total surface area of the island, is UAA, 80% of which is cultivated (36 500 hectares).

There are 11 000 holdings, 75% of which have less than 5 hectares, the average size per holding being 3.9 hectares of UAA.

Farm workers make up 6% of the total labour force. FAO amounts to about FRF 2 100 million (1998), with animal products accounting for 32%, the highest share in the overseas departments.

Sugar cane growing, which covers 26 000 hectares (or almost 60% of UAA and 75% of arable land), is an essential aspect of the farm sector in Réunion. Cane, mainly used for sugar manufacture (sugar production is about 200 000 tonnes), contributes 31% of FAO. 49% of holdings are principally engaged in sugar cane growing. In 1995, exports of sugar totalled FRF 655 million.

The other traditional agricultural products are vanilla, essential perfume oils (geranium, vetiver, ilang-ilang) and pineapples.

Livestock farming has developed, and cover ratios are fairly high for animal products: almost 20% for milk, about 50% for meat (and almost 65% for pigmeat and poultry), and over 90% for eggs. Development is continuing thanks to a policy of developing pastures at high altitudes, and in particular the development programme for the Heights of Réunion, where one fifth of the population lives, and where agricultural activities, herding and forestry are gaining importance.

ANNEX 2 Specific supply arrangements (SSA) -- achievements

Implementation by marketing or calendar year of supply balances adopted (source: Ministry of Agriculture)

1992 - Cereals

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* - 1991/92 marketing year ** - second half-year only.

1993 - Cereals

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* - 1992/93 marketing year

1994 - Cereals

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* - 1993/94 marketing year

1995 - Cereals

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* - 1994/95 marketing year ** - from 01/07/94 to 30/04/96; unregulated period.

1996 - Cereals

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* - 1995/96 marketing year ** - from 1 May

1997 - Cereals

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* - 1996/97 marketing year

1998 - Cereals

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* - 1997/98 marketing year ** - 1997/98 marketing year, implementation up to 31 December 1997.

Aid for the supply of breeding animals (originating in the EU)

Bovine animals:

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Horses:

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Sheep and goats:

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Eggs and chicks:

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Rabbits:

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Swine:

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Supply of wheat bran to Réunion:

Years // Licences utilised (tonnes)

(1992) // (425)

1993 // 4 793

1994 // 6 125

1995 // 6 804

1996 // 5 382

1997 // 7 236

1998 // 6 372

Average // 6 119

ANNEX 3 Specific aid for local agricultural products

The statistical data in this annex were supplied by the Overseas Secretariat of the Ministry of Agriculture, unless otherwise specified

Table 1 Article 5: premium for the maintenance of the suckler cow herd (number of animals)

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Table 2

Article 5: special premium for male bovine animals (number of animals)

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Table 3

Aid for the development of local production of cows' milk

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* Milk years run from 1 April to 31 March.

Table 4a

Article 9a (interbranch) -MARTINIQUE

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Table 4b: Article 9a (interbranch) -REUNION

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Table 5 Aid for the marketing of local products exclusively intended to supply the markets of the overseas departments

The table shows details of products by category, and indicates planned quantities and the amount of aid provided for in the implementation rules

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Table 6 Aid for the marketing of local products exclusively intended to supply the markets of the overseas departments

This table shows the number of applications received

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Table 7

Production of geranium and vetiver

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Table 8

Article 14: aid for processing fruit and vegetables

This table shows details of eligible products, quantities and amounts of aid per category

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Table 9

Aid for sugar cane growing

This table shows the breakdown of eligible areas by overseas department and annual balances for areas subsidised (in hectares)

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*In Réunion, it was decided to reduce aid per hectare so as to subsidise a larger area with the same budget.

P = plantation I = land improvement

Table 10

Aid for processing cane into agricultural rum

(volume in hl)

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Table 11

Aid for marketing rice from French Guiana

Quantitative balances by marketing year (Antilles) are shown in this table

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* in 1998 aid was requested for 6 425.56 tonnes of husked rice, but as the application was incomplete, it was returned; consequently, definitive results cannot yet be given.

Table 12

Budget forecasts and implementation for items in financing of agricultural aspects of POSEIDOM

(EUR million)

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Source: EAGGF Guarantee Section

ANNEX 4 Structural derogations

On structural aid for holdings, Article 21 of Council Regulation (EEC) No 3763/91 derogates from Council Regulation (EEC) No 2328/91 (superseded by Regulation (EC) No 950/97) on improving the efficiency of agricultural structures. The derogations are as follows.

-There is a derogation, for pig production, from the principle laid down in Article 6(4) of Regulation (EC) No 950/97, according to which investment aid to holdings that would extend production capacity is restricted by conditions defined for each sector. With regard to eggs and poultry production, in view of the need to ensure balanced development in the overseas departments, aid is authorised for family farms.

-There is a single rate for modernisation aid in the overseas departments, applicable irrespective of the type of asset, movable or immovable, for which the aid is paid; on a reasoned request, it may be decided to derogate from the investment ceiling referred to in Article 8.

-In the overseas departments, expenditure relating to initial stock purchases of pigs and poultry may eligible under the system of investment aid. The derogations apply only in so far as livestock production on pig and poultry farms is undertaken in a manner compatible with animal welfare and environment protection requirements and provided that the production is for the domestic market of the departments concerned.

-The compensatory allowance referred to in Article 17 may be granted for all crops, provided they are cultivated in a way compatible with environmental protection requirements and subject to a maximum income per holding to be determined.

-Cows whose milk is intended for the domestic market of the departments concerned may be taken into consideration for the calculation of the compensatory allowance up to a maximum number of 20 livestock units.

For measures concerning aid to improve processing and marketing of agricultural and forestry products, the derogations in Article 21 of Council Regulation (EEC) No 3763/91 relate to Regulation (EEC) No 866/90, replaced by Council Regulation (EC) No 951/97 of 20 May 1997 for agricultural products, and to Council Regulation (EEC) No 867/90 of 29 March 1990 for forestry products.

Commission Decision 94/173/EC of 22 March 1994 provides for the selection criteria to be specially adapted to the overseas departments. Prohibitions on financing investment in the animal feedingstuffs sector are not applicable, as long as the production is intended for local supply.

Moreover, pursuant to Commission Decision 97/37/EC of 18 December 1996:

-investment in the processing or marketing of products from third countries may be financed, provided the processed and/or marketed products resulting from the investments financed are intended exclusively for the market in the French overseas departments,

-for cereals and oilseeds/protein crops, investments relating to silos are eligible in Réunion and Martinique, where the maximum capacity of 20 000 tonnes for animal feed facilities does not apply,

-for Martinique and French Guiana, neither the obligation to reduce poultry slaughter capacity nor the prohibition on an increase in egg packaging capacity applies.

Article 21 was deleted by the new rural development Regulation (EC) No 1257/1999. Only Recital (53) of the rural development Regulation refers to the specific requirements of these regions, but there is no operative part in the text of the Regulation. The requests for flexibility, adjustments or derogations and the proposed solutions should be studied at the time of the review provided for in the programming exercise.

ANNEX 5 Veterinary and plant health measures

Article 10(1) of Council Regulation (EEC) No 3763/91 amends Article 24 of Council Decision 90/424/EC on expenditure in the veterinary field. It enables the Community to contribute up to 50% to specific veterinary measures, inspection measures in the veterinary field and programmes for the eradication and monitoring of animal diseases.

By Decision 94/148/EC (OJ of 8 March 1994), the Commission approved a common programme for Guadeloupe and Martinique, for the eradication of cowdriosis and babesiosis, and a programme for the eradication of anaplasmosis and babesiosis in Réunion (in practice, these programmes organise the control of ticks and insect vectors of the diseases).

The Guadeloupe programme had to be interrupted; following the reorganisation of the departments health protection groups, a new programme was presented to the Commission for 1999.

French Guiana, which was previously unable to take part in the scheme, should be presenting a programme in 1999. Only Martinique and Réunion have been able to take part in the scheme since the outset.

The programme in Martinique comprises two measures:

-census and identification of the herd: at the end of 1998, the herd of 70% of the 4 158 stockfarmers registered with the Chamber of Agriculture could be identified, an increase of 27% on the previous year; the number of registered animals increased from 22 218 to 27 774, an increase of 25%,

-de-ticking: either by dipping, spraying or "pour on" (insecticide poured on to the animal's back). The aim for 1998 is to de-tick 100% of the cattle herd. Arrangements are being introduced to assess the programme, in particular through tick counting and a serological review.

In Réunion, the first part of the programme is to carry out a census of the herd; the aim for 1998 is to bring the census up to date and to identify over 90% of the bovine herd. Measures include chemical control (with the aim of achieving 75% coverage of herds) and biological control involving the breeding of parasitised stomoxys larvae, stinging insects, to be released at their reproduction sites (this method was introduced in a pilot area in 1997,and the aim for 1998 is its generalisation). A final serological review is planned as an assessment tool.

Derogations from health rules

In view of the exceptional health situation in the overseas departments, Article 31a of Directive 91/496/EEC provides that public health requirements laid down for imports of bovine animals and swine and fresh meat from third countries may be waived for imports into the overseas departments.

Only one application for this derogation has been received by the French authorities: in June 1996, a request was made for the import from the United States to Martinique of breeding bulls of the Brahman breed. The justification given was the need to introduce animals of high genetic quality while avoiding the risk of consanguinity. It was argued that French Guiana's bovine herd, with similar features to that of Martinique, could also benefit from the genetic input from the US.

The Commission rejected the application because of the presence of catarrhal fever, considering that the derogation represented a danger for the level of health in Martinique and the operation of the internal market.

Plant-health programmes

Article 11 of Regulation (EEC) No 3763/91 provides that the Community shall contribute to financing annual programmes for the control of organisms harmful to plants or plant products, covering up to 60% of eligible expenditure (measures to protect banana cultivation are excluded). The eligible measures were defined by Commission Decision 93/522 of 30 September 1993. Other programmes were approved for subsequent years.

A review of the measures shows positive results on the whole, with the reinforcement of the activities of the Departmental Federations of pest control groups, whose membership is growing, with much more involvement on the part of farmers. The application of new means has enabled control programmes to be intensified, especially defence against rodents, and boosted information campaigns (plant health leaflets, summary of products in use, dissemination of information on control methods).

The main types of measure, by department, are as follows.

Martinique: methods for the detection of pests (fruit-fly, pink mealybug, citrus leafminer); control of crop pests (deratisation, consciousness raising); integrated pest control in horticulture (consciousness raising and support, testing and demonstration of products), setting up and running a laboratory for the analysis of pesticide residues, organic and integrated crop management.

Réunion: organisation of assessment, analysis, and diagnosis of plant health risks (consultancy diagnosis, publication, integrated organic protection and action, improvement of vanilla plantations); development of methods for the control of the main enemies of crops (support for compulsory control of fruitfly, collective compulsory control of locusts, fire ants, tomato yellow leaf curl virus); control of citrus mealybug and leafminer; applied research on harmful organisms.

French Guiana: development of analytical and diagnostic structures (setting up of itinerant laboratories in several cases) to create synergy between research bodies and development structures; observation and alarm networks, in particular installation of traps (fruitfly), to improve knowledge of the plant health situation; campaign for the detection of certain quarantine viruses; development of control methods for major pests through training of farmers and decentralised availability of plant health equipment and products; reasoned control of weeds and pests in the rice-growing sector.

Guadeloupe: disease and pest control (corn borer, leaf-cutter ant, scale, giant snail etc.); establishment of a floral quarantine site in Guadeloupe.

Budgets and expenditure (ECU thousand)

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ANNEX 6 EAGGF Guidance Section measures

EAGGF Guidance Section financing is not covered by this report on the agricultural aspects of POSEIDOM; this paragraph provides a summary description, with a view to providing a consistent presentation of all Community measures in favour of the agricultural sector in the overseas departments, since it is essential to coordinate them.

Period 1989-1993

To make up for the shortage of Structural Fund resources in the period, and to enable POSEIDOM to be implemented upon submission of a project by the French authorities, two one-year programmes were adopted (1992 and 1993) for specific measures in the banana sector in favour of Martinique and Guadeloupe, and in the sugar cane sector in favour of Martinique, Guadeloupe and Réunion.

These two programmes, common to the three departments (one decision per year) involved EAGGF appropriations of ECU 12 million and ECU 18 million respectively. Uptake was close to 100%.

Period 1994-1999

The appropriation (SPD and Regis II) was much higher than previously.

EAGGF-Guidance Section funding for the overseas departments:

Réunion EUR 152.773 million

Guadeloupe EUR 76.860 million

Martinique EUR 67.923 million

French Guiana EUR 27.400 million.

Period 2000-2006

SPDs for the four overseas departments cover rural development measures for the period 2000-06 on the basis of Regulation (EC) No 1257/1999. Measures financed under the amended Article 17 of Regulation (EEC) No 3763/91 are re-entered in the SPD, and the Member State has proposed new Article 17 content (aid for management and for transport). Requests for derogations from the requirements of Regulation (EC) No 1257/1999 (higher rate of public aid for investment in agricultural holdings and for processing of local agricultural products, eligibility of public or state-owned forest other than municipal) for certain projects were withdrawn in the course of negotiations, and the SPDs are in the process of being adopted in line with current rules in force.

For information, the EAGGF-Guidance Section allocation for 2000-2006, by department, is as follows:

Réunion EUR 300 million

Guadeloupe EUR 140 million

Martinique EUR 100 million

French Guiana EUR 63 million.