Opinion of the Committee of the Regions on:

- the "Proposal for a Council Regulation amending Regulation (EC) No 1251/99 establishing a support system for producers of certain arable crops to include flax and hemp grown for fibre", and

- the "Proposal for a Council Regulation on the common organisation of the market in flax and hemp grown for fibre"

(2000/C 317/16)

THE COMMITTEE OF THE REGIONS,

having regard to Proposal for a Council Regulation amending Regulation (EC) No 1251/99 establishing a support system for producers of certain arable crops to include flax and hemp grown for fibre (COM(1999) 576 final - 99/236 (CNS))(1);

having regard to Proposal for a Council Regulation on the common organisation of the market in flax and hemp grown for fibre (COM(1999) 576 final - 99/237 (CNS))(2);

having regard to the decision taken by the Council on 15 November 1999, under the first paragraph of Article 265 of the Treaty establishing the European Community, to ask the Committee to issue an opinion on this subject;

having regard to the decision taken by the Committee's President on 23 February 2000 to instruct Commission 2 - Agriculture, Rural Development and Fisheries - to prepare the opinion;

having regard to Council Regulation (EEC) No 1308/70 of 29 June 1970 on the common organisation of the market in flax and hemp(3);

having regard to Council Regulation (EEC) No 619/71 of 22 March 1971 laying down general rules for granting aid for flax and hemp(4);

having regard to Council Regulation (EEC) No 620/71 of 22 March 1971 laying down outline provisions for contracts for the sale of flax and hemp straw(5);

having regard to Council Regulation (EEC) No 1172/71 of 3 June 1971 laying down general rules on private storage aid for flax and hemp fibre(6);

having regard to Council Regulation (EEC) No 1430/82 of 18 May 1982 providing for restrictions on the importation of hemp and hemp seed and amending Regulation (EEC) No 1308/70 in respect of hemp(7);

having regard to Council Regulation (EEC) No 2059/84 of 16 July 1984 laying down general rules relating to the import restrictions on hemp and hemp seed and amending Regulation (EEC) 619/71 in respect of hemp(8);

having regard to the draft opinion (CdR 99/2000 rev. 1) adopted by Commission 2 on 4 May 2000 (rapporteur: Mr Ballhausen, Delegate for Federal and European Affairs of the Land of Saxony-Anhalt (D, PSE));

whereas the current provisions governing the common organisation of the market in flax and hemp need, in the European Commission's view, to be amended for a number of reasons: they are highly complex and therefore involve a considerable burden of administration; and budgetary expenditure on fibre flax and hemp almost doubled between 1995 and 1999 (1999 figure: approximately EUR 124 m);

whereas in putting forward its Proposal for a Council Regulation amending Regulation (EC) No 1251/1999 establishing a support system for producers of certain arable crops to include flax and hemp grown for fibre and its Proposal for a Council Regulation on the common organisation of the market in flax and hemp grown for fibre, the Commission is therefore seeking to (a) simplify the common organisation of the market in flax and hemp, (b) prevent cultivation of these crops for the sole purpose of receiving subsidies, without the product being processed, and with a view to the illegal use of hemp and (c) cut budgetary expenditure on the common organisation of the market in flax and hemp;

whereas the European Commission puts forward the following proposed reforms in particular:

- the inclusion of fibre flax and hemp in the arrangements provided for under Council Regulation (EC) No 1251/1999 establishing a support system for producers of certain arable crops;

- the alignment of the area payments for flax and hemp on those granted for linseed and the gradual reduction of these payments to reach the level of those applicable to cereals by the 2002/2003 marketing year;

- in parallel with the reduction of the area payments it is proposed to introduce additional, quantity-based processing aid for flax and hemp straw under which the existing level of aid for long fibres would be more or less maintained whilst the level of aid for short flax fibre and hemp fibre would be set at EUR 40/tonne up to the 2004/2005 marketing year;

- the introduction of provisions for stabilising budgetary expenditure on processing aid; these provisions would take the form of National Guaranteed Quantities for flax and hemp fibres;

- Member States are to be obliged to establish maximum areas eligible for area payments for hemp so that they can ensure verification of the tetrahydrocannabinol (THC) content of the crops grown on 30 % of the areas for which area payment applications have been made;

- the introduction of a system of authorisation to grow hemp;

- the introduction of rules governing imports of hemp from third countries;

- the reforms are to come into effect from the 2000/2001 marketing year,

unanimously adopted the opinion set out below at its 34th plenary session held on 14 and 15 June 2000 (meeting of 14 June).

The Committee of the Regions:

1. draws attention to the fact that the cultivation of renewable raw materials can open up new alternative sources of income for farmers;

2. points out that the establishment of processing capacities may make a contribution to economic development and the creation of jobs in structurally-disadvantaged rural regions;

3. underlines the importance of flax and hemp cultivation as a key element in the establishment of a sustainable agricultural sector in tune with the environment;

4. draws attention to the fact that increased environmental awareness and the attendant growth in demand for environmentally-friendly products of agricultural origin have led to a considerable increase in the areas under both hemp and flax in a number of Member States in recent years;

5. shares the concern of the European Commission that the additional burden placed on the budget as a result of the considerable increase in the areas sown to flax and hemp must be addressed not by freezing production but by reviewing the whole policy for the sector;

6. supports the European Commission in its desire to simplify the provisions of the common organisation of the market in flax and hemp and to prevent possible abuse of the system through subsidy-driven cultivation and cultivation for illegal purposes;

7. would however draw attention to the fact that (a) the common goal of simplifying the provisions cannot readily be achieved on the basis of the proposals put forward by the European Commission for amending the common organisation of the market and (b) the proposed implementing arrangements are more likely to result in a considerable increase in bureaucracy both for the business world and administrative bodies;

8. therefore believes that the administrative procedures provided for in the European Commission's draft document should be simplified;

9. draws attention to the decisive factor that aid should in future be shaped in such a way so as to facilitate viable production and ensure that adequate home-produced quantities of raw materials are available for the developing processing industry, which is also of key importance to employment in the areas suffering from the highest level of structural disadvantage;

10. considers that the level of support for long and short fibres should be identical and that aid should be phased out over a longer period;

11. opposes the introduction of quotas since that could hinder the development of flax and hemp production in the regions where there is greatest scope for development;

12. strongly urges that the maximum guaranteed quantities be established in line with the existing processing capacities and processing capacities being created in the individual regions;

13. affirms the need for the Commission to study and define the potential positive and negative economic consequences for producers and for the development of associated manufacturing activities, before drawing up a whole new policy for the industry;

14. therefore underlines its demand that the proposed amendment to the common organisation of the market for flax and hemp and the associated new provisions should come into effect at the earliest by the 2001 sowing season.

Brussels, 14 June 2000.

The President

of the Committee of the Regions

Jos Chabert

(1) OJ C 56 E, 29.2.2000, p. 17.

(2) OJ C 56 E, 29.2.2000, p. 19.

(3) OJ L 146, 4.7.1970, p. 1.

(4) OJ L 72, 26.3.1971, p. 2.

(5) OJ L 72, 26.3.1971, p. 4.

(6) OJ L 123, 5.6.1971, p. 7.

(7) OJ L 162, 12.6.1982, p. 27.

(8) OJ L 191, 19.7.1984, p. 6.