Opinion of the Economic and Social Committee on the "Proposal for a Council Regulation extending for a period of up to one year the financing of certain quality and marketing improvement plans approved under Title IIa of Regulation (EEC) No 1035/72"

(2001/C 116/13)

On 20 October 2000 the Council decided to consult the Economic and Social Committee, under Article 37 of the Treaty establishing the European Economic Community, on the above-mentioned proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 15 November 2000. The rapporteur was Mr de las Heras Cabañas.

At its 377th plenary session (meeting of 29 November 2000) the Economic and Social Committee adopted the following opinion by 107 votes to one with two abstentions.

1. Introduction

1.1. The proposed regulation follows on from the first part of the agreement reached by the Council of Ministers meeting in Brussels on 17 July 2000 whereby it invited the Commission to propose that the payments to nut (almonds, hazelnuts, walnuts and pistachios) and locust bean growers, which expire in 2000, be continued for one year within the budget for 2001. In addition, it instructed the Commission to carry out a specific study of the nut and locust bean sector in the context of the report which it has to present before the end of 2000 on the fruit and vegetables regime.

2. Background

2.1. The 10-year improvement plans launched in 1989 under Title IIa of Regulation (EEC) No 1035/72 have had a substantial impact in some Member States on the organisation of production, the concentration of supply and the improvement of production and marketing structures. These plans have helped to maintain producers' incomes and slow down the abandonment of nut and locust bean growing in the producer regions of the EU.

2.2. However, the special problems of nuts and locust beans were not taken into account by Regulation (EC) No 2200/96 on the reform of the common organisation of the market in the fruit and vegetables sector, which revoked the existing measures. The measures laid down in this regulation have not proved adequate because they are not geared to the specific features of these crops.

2.3. On account of the particularly unfavourable situation affecting the hazelnut sector, Article 55 of Regulation (EC) No 2200/96 established a flat-rate aid for producer organisations for hazelnuts harvested in the 1997/1998, 1998/1999 and 1999/2000 marketing years. This aid has had a decisive effect on the growth of producer organisations in Italy and has helped to offset the competitive disadvantage suffered by Community hazelnut producers due to the continuing adverse market situation.

3. General comments

3.1. Nuts and locust beans are grown extensively in disadvantaged Mediterranean regions of the EU (900000 hectares). The survival of this sector is vitally important for the EU's producer regions as it benefits employment, the environment, the countryside and cultural heritage, allowing farms to diversify and keep going, forming a barrier against encroaching desertification. Alternatives to these crops are very limited or non-existent and the constraints of the CAP do not allow them to be replaced by others.

3.2. The production of nuts and locust beans is the basis of a substantial processing industry which generates employment and economic activity in disadvantaged rural areas. Both the primary and secondary processing industries involve a large number of firms of all sizes and types, from peelers and breakers to roasters, the chocolate industry, ice-cream industry, traditional sweets, and small-scale and industrial confectionery.

3.3. The consumption of nuts in the EU and the rest of the world is steadily growing because advances in agri-food technology have enabled them to be incorporated in a multitude of food products, because consumers like to include them in their diet on account of their high nutritional value, fibre, protein, mineral and vitamin content, and because of their health benefits, in particular their high levels of mono and polyunsaturated fatty acids which help to prevent cardiovascular illnesses.

3.4. The EU has a marked deficit in these products which has to be covered by imports from third countries, in particular almonds and walnuts from the US and hazelnuts from Turkey. Bearing in mind that these are virtually the only countries supplying these products to the EU, it would be advisable to maintain present EU production levels so as not to become over-dependent, with the risk that this entails for prices and hence consumers.

3.5. There is little protection for these products at the EU's borders because of its low level of self-sufficiency, with very low tariffs exacerbated by concessions granted to the main supplying countries in trade agreements. Almond and walnut production in the USA is highly intensive, comprising a production system radically different from that of the Mediterranean countries, with high yields and low production costs making for prices lower than those achievable by Community producers. Turkey is highly competitive mainly because of low labour costs and higher rainfall in its production zone. Furthermore, the current regulations do not ensure that imported products respect the same labour, plant health and environmental standards as EU products.

3.6. The Committee would highlight the small financial impact of the measures in the nuts and locust beans sector compared with their impact on the concentration of supply, improving the quality and marketing of the products and their social and environmental benefits. The support measures for the sector account for a tiny proportion of EAGGF spending, representing 0,2 % of the Community budget. The Committee would point out that its opinion(1) of 19 October 2000 on the fruit and vegetables regime called for adequate financing commensurate with its needs and importance (see points 2.8.2, 2.8.3, 2.8.4, 2.8.5 and 4.1.2).

4. Specific comments

4.1. Regarding the proposal

4.1.1. The Committee would have liked the Council and Commission to present a final proposal for the future of the nuts and locust beans sector, but nevertheless welcomes this proposal as a transitional solution to deal with the critical situation of the producer organisations whose plans expire in 2000.

4.1.2. The Committee considers that the Commission's proposal does not accord precisely with the spirit and letter of the conclusions of the Council of Agriculture Ministers meeting of 17 July 2000, since it does not envisage co-financing all the actions carried out under producer organisations' improvement plans expiring in 2000, accepting only applications for aid for work carried out up to 15 June 2001. This date should therefore be extended to 31 December 2001.

4.1.3. The Committee considers that the unfavourable market conditions which necessitated the introduction of the specific measure for the hazelnuts sector have not changed greatly. Bearing in mind its small financial impact and the extension of the other measures applicable to nuts and locust beans, it would be logical to extend the flat-rate aid under Article 55 of Regulation (EC) No 2200/96 for the 2000/2001 marketing year.

4.1.4. The Committee has misgivings about the third clause of the preamble to the proposal as there is a danger that the principle of degressive aid and a progressive shift of responsibility to the producers could serve as pointer to a long-term solution to the problems of nuts and locust beans.

4.2. Regarding the future of the nuts and locust beans sector

4.2.1. The Committee considers that a long-term solution is needed for the nuts and locust beans sector. It urges the Commission to present, before the end of 2000 and in tandem with the specific study on the nuts and locust beans sector to form part of the report on the fruits and vegetables regime, a proposal with new support measures for nuts and locust beans. These measures should be incorporated in Regulation No 2200/96 and comprise:

- the introduction of a flat-rate aid per unit of land through the producer organisations. This aid should be subject to precise arrangements;

- an extension of the flat-rate aid for hazelnuts after the 2000/2001 marketing year.

4.2.2. In view of the poor market situation for chestnuts, their inclusion in the measures applicable to nuts and locust beans should be studied.

4.2.3. The Committee would point to the need to establish a Community register of the land used for growing nuts and locust beans and to reinforce the checks on marketing standards and plant health for imported products. The sensitivity of these products should be borne in mind when contemplating any new concessions in this sector in trade agreements with third countries.

5. Conclusion

5.1. In view of the versatility of nut and locust bean production and the persistence of the adverse market situation which necessitated the introduction of support measures for this sector, the Committee considers that the measures which expire in 2000 should be extended in an appropriate manner on a transitional basis. At the same time new support measures should be proposed as a definitive solution to the problems of these products with the aim of ensuring an adequate income for Community producers, a balance between regions, and of giving consumers access to a varied supply of these products at reasonable prices throughout the Community.

Brussels, 29 November 2000.

The President

of the Economic and Social Committee

Göke Frerichs

(1) OJ C 14, 16.1.2001, p. 157.