Opinion of the Economic and Social Committee on the 'Promotion of local speciality agricultural products as a development instrument under the new CAP` (98/C 284/12)

On 29 January 1989 the Economic and Social Committee, acting under Rule 23(3) of its rules of procedure, decided to draw up an opinion on the 'Promotion of local speciality agricultural products as a development instrument under the new CAP`.

The Section for Agriculture and Fisheries, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 16 June 1998. The rapporteur was Mrs Santiago.

At its 356th plenary session (meeting of 1 July 1998), the Economic and Social Committee unanimously adopted the following opinion.

1. Introduction

1.1. The Agriculture and Fisheries Section's visit to the Douro region in Portugal on 18 and 19 September 1997 impressed upon it the need to promote and publicize local speciality agricultural products. Accordingly, the Economic and Social Committee decided to draw up an own-initiative opinion dealing with the promotion of these products as a development instrument under the new CAP.

1.2. The increasing standardization of the characteristics of many food products is both a consequence of and an incentive for the marketing of a greater profusion of products. However, it can also have an impact on the number of products which have specific features associated with their place of origin and whose particular production methods and increasing guarantees of quality are difficult to copy.

1.3. Original manufacturing methods are used to make premium local products from quality raw materials. The appearance and specific taste of these products make them more appealing than other similar products, and are always associated with a particular region.

1.4. These products are often manufactured under circumstances which are difficult or impossible to replicate outside their place of origin, and unless these specific circumstances and features are recognized and protected, it will be difficult for them to remain available on the market, since such recognition is vital to their value added; this, in turn, is of benefit to all links in the chain, particularly the farmers.

1.5. Once a product is recognized as a premium product, it is easier for it to obtain value added. This boost to its promotion can make the production system and job situation more stable, thereby helping to raise the living standards of the local population and providing valuable support for rural development, by means of integrated local development policies.

2. General comments

2.1. European agriculture not only has the task of producing wholesome, quality food and non-food products. It also plays a key role in land-use and development, maintaining jobs, and giving a boost to rural areas, local culture and traditions, natural resources, the environment and the beauty of the countryside.

2.2. The identity of European farming is rooted in an equilibrium between people, production and the land, its human dimension and cultural heritage.

2.3. Against a background of increasing market liberalization, and as part of the new direction given to the Common Agricultural Policy, there is a need to diversify farm production so as to strike a better balance between supply and demand.

2.3.1. The Commission estimates that present-day production of quality local products constitutes a mere 10 % of European agricultural production and 20 % of value added. If these figures could be increased, these products could secure a significant market share and provide the key to economic progress in less-favoured rural areas. The new agricultural policy reform currently under discussion should bear this in mind.

2.4. Europe does produce limited amounts of agricultural products whose place of origin and specific production methods distinguish them from other similar products on the market; these premium products favour quality over mass production.

2.4.1. If consumer demand for quality products is to be increased, it will be necessary for these products to be safe, have a characteristic taste, texture and appearance of their own, keep their taste and other characteristics to a high degree, be subject to reliable quality control and be different to other products of the same type.

2.4.2. Since the production processes of quality local products use traditional techniques and recipes, they do not need additional precautions or treatment, nor do they employ methods or products harmful to the environment. This helps to boost consumer confidence in them.

2.5. The promotion and development of these products may prove an important asset for rural areas, particularly less-favoured and peripheral areas and upland areas (from where 80 % of these products originate). The resulting cultural boost can be a determining factor in sustainable rural development, the stabilization of local populations and job creation.

2.5.1. Despite the fact that quality products may benefit from technological innovations and labour-saving methods, production is labour-intensive because of the precise nature of the work and the processes that have to be used.

2.5.2. Often this can mean that more people have to be employed in the manufacture of these products, which in turn means greater value added.

2.6. Two Community legal instruments have proved valuable in promoting premium agricultural production. These are Regulation (EEC) No 2081/92 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs and Regulation (EEC) No 2082/92 on certificates of specific character for agricultural products and foodstuffs.

2.6.1. For wine, quality criteria and designations of origin are set out in a separate Council Regulation - (EEC) No 823/87 - which lays down special provisions relating to quality wines produced in specified regions.

2.6.2. Although many products have already been granted a designation of origin and geographical indication, they cannot become competitive without supply consolidation, technological modernization and suitable marketing techniques. Regional development projects should cater for these aspects. Cooperation between producers via cooperatives and similar organizations could make a major contribution to this.

2.6.3. Over and above the value derived from the very fact that product names (be they geographical or traditional) are protected, there is the further advantage that production is covered by a set of rules which producers themselves have helped to put together, thus voluntarily undertaking to comply with them. This helps all members of the production and distribution chain to work together, and to apply effective inter-trade monitoring.

2.6.4. The positive effects of these Community instruments have already become clear, in terms of improvements in some manufacturing conditions, support from an increasing number of producers, compliance with natural manufacturing conditions, respect for the environment, and higher incomes for producers.

2.6.5. Improvements have also been apparent in marketing, especially in the care put into the packaging and presentation of products, making them more appealing to the consumer, with the result that an increasing share of the market is being won over.

2.6.6. One significant aspect is the growing number of commercial outlets interested in these products, especially supermarkets, where great pains are taken to make an attractive display of such products; this highlights the quality policy pursued by some of these outlets.

2.7. In 1992 the European Community set up schemes for promoting and protecting geographical designations (PDO and PGI) and traditional specialities (TSG).

2.7.1. What is a PDO?

2.7.1.1. Protected designation of origin (PDO) is the label given to a product produced, processed and prepared in a defined geographical area, using recognized and proven know-how.

2.7.1.2. In the interests of consumers, the PDO may be replaced by equivalent traditional labels (AOC in French, DOC in Italian) or by the Spanish 'denominación de origen`, and the Portuguese 'denominação de origem controlada`.

2.7.2. What is a PGI?

2.7.2.1. Protected geographical indication (PGI) means that there is a link with the geographical environment in at least one of the stages of production, processing or preparation. In this case the reference to PGI can be on the packaging.

2.7.3. What is a TSG?

2.7.3.1. A traditional speciality guaranteed (TSG) does not refer to the origin, but is designed to highlight a product's traditional composition or production method.

2.8. Consumers' growing preference for high-quality foodstuffs brings a need to publicize the existence of these products adequately; in many cases they are only known about and appreciated by small groups of people.

2.8.1. Since certain aspects of the CAP may make it difficult for some of these products to survive and penetrate the market, there is a need for promotional and publicity campaigns within and outside the Community; campaigns of this type could benefit from Community funds available for this purpose, by using appropriate stock-taking techniques and raising public awareness of production processes. The aim would be to generate consumer interest in these products and encourage consumers to purchase them more frequently.

3. A case in point: the port-wine region

3.1. There are undoubtedly many examples of local speciality products throughout the European Union: witness the high number of products already registered as such.

3.1.1. The broad aim of this opinion is to laud the virtues of local speciality products in general. However, in this section we shall confine our comments to port wine and the area in which it is produced, the Douro region.

3.2. The Douro region, with the particular way it manages its vineyards to produce a wine of world-wide renown, was the first 'registered designation of origin` in the world (the designation dates from the second half of the 18th century). The area is a textbook example of how the ingenuity, ability and hard work of a local population can transform an undeveloped rural region into a premium production area.

3.3. The officially demarcated region of the Douro has a typically Mediterranean climate with hot, dry summers and relatively low annual rainfall; it is no more than a narrow strip of land running along the Douro valley, upstream from Barqueiros to the Spanish border.

3.4. Here, a very special set of features have developed in the area around the Douro river, upstream from Armamar and in the sheltered valleys along the riverbanks; the planting of vines in the schistous soil of hillsides which, until then, were nothing more than scrubland, was begun in the 17th century. The structure of stepped terraces, designed to shore up the earth, reflects intense human activity which has continued in the way the system has been used, and has forged unique rural landscape of great beauty, thus establishing a very close relationship between product quality and the beauty of the landscape.

3.5. In spite of the major technological advances which have taken place since the 18th century, the processes employed in producing the wine have allowed a balance to be maintained between farming and the environment.

3.6. The narrow terraces only allow the use of traditional, highly labour-intensive techniques. The optimum use made of exposure to the sun and the combined effect of soil quality and solar radiation enable these vineyards to produce the generous, high quality port wines that they do.

3.7. One element which has changed is that the layout of the terraces has been adapted to the need for mechanized tillage, creating pathways at the ends of the terraces which the equipment can use without, however, visibly altering the landscape.

3.8. In contrast to the vine-clad hillsides, there are also 'withered` terraces abandoned after the vines were devastated by phylloxera. These terraces are now overgrown or, in places, have been used for recent forest landscaping projects.

3.9. Secondary to the vineyards, semi-intensive horticultural and fruit-growing businesses are being developed in the region. These have a considerable impact on the traditional farm economy, although they only take up small areas of land. This type of farming, in sheltered valleys, is complementary to the vineyards and vital for maintaining a balanced livelihood.

3.10. The specific features of the port wine region were neatly described by the American geographer, Dan Stanislawski, in 1970, as follows:

'Port Wine is a great wine because it is the product of long experimentation, meticulous attention to details, and strict controls; and no Portuguese vineyardist would doubt that the environment of the Douro valley, its place of origin, has played an important part in its ultimate character. It is an aristocrat among the highly elaborated agricultural products of the world: no grape used in it has not been subjected to rigorous inquiry into its birth and upbringing, its current circumstances, companions, habits and appearance. Up to that point the assumption is made that place of birth and subsequent care are a sine qua non; but as everyone knows, there are well-born, well-schooled mediocrities within any select group, and objective tests must be made to eliminate all but those of proven excellence. Such tests are made by tasters, experienced judges uninformed as to the birthplace or antecedents of the objects of their appraisal. They must pass on all wines; and normally they accept only about one-third of the production of the zone. The other two-thirds is sold as ordinary table wine or made into brandy` ().

3.11. Living conditions of the Douro region population and their dependence on the wine-producing system

3.11.1. Despite the fact that this is a region where the environment is not very propitious to farming, the types of farming employed allow a population density of 57 inhabitants per square kilometre. Most farms are small; 8 000 wine growers produce between five and 15 hectolitres, 15 000 produce up to 25 hectolitres and 10 000 produce more than 25 hectolitres. The area has no mineral resources, nor is there any industrial activity of note. Wine thus constitutes the main source of income for the local population, and the value added from the quality product which is port wine is of unquestionable importance for the region's income.

3.11.2. Thus, in this difficult region, the local population has managed to establish a farming system which does not harm the environment but actually protects it, creating a humanized landscape with such special features that it has been proposed that it be classified a world heritage site, as it is a cultural landscape representing the combined work of nature and man.

4. Conclusions

4.1. Local speciality products have, in some regions, contributed to the well-being of local populations, sustainable rural development and the promotion of rural tourism. Most importantly, they have encouraged young people to remain in rural areas, playing a concrete part in the preservation of cultural values.

4.1.1. It would be helpful if this process could be made more widespread, by improving vocational training so as to help maintain or increase production flows.

4.2. It has already been noted that 80 % of quality local products come from less-favoured upland areas. This can be seen, in a rather bizarre sociological way, as an act of historical and geographical revenge by nature.

4.3. There are of course further examples of this phenomenon in other countries of the European Union, as can be seen from the high number of products registered under the PDO, PGI and TSG labels.

4.4. As early as 1989, in its opinion on the future of rural society, the Committee stressed that 'a comprehensive quality policy is needed` and that 'in most less-favoured regions quality products have a tradition that must be maintained and developed` ().

4.5. In this own-initiative opinion drawn up against the background of a new CAP, when Agenda 2000 promises another period of great change for European farmers, the Committee calls on the Commission to put into practice effective measures and methods to promote quality local products which are an integral part of the Community's historical and cultural heritage. Demand for premium products will only increase if consumers can be sure that they are safe and of high quality.

4.6. These measures must include steadfast moves to defend local speciality products in GATT and WTO negotiations, as was the case in the 1994 Marrakesh Agreements (Articles 23 and 24).

4.7. Use of designations of origin for product imitations made outside the official place of origin, such as port, chianti, champagne, parmesan and many others must not be allowed. International rules on intellectual property must be used to prevent third countries appropriating designations of origin or marketing designated products. No country, region or product within or even outside the European Union has the right to usurp something which has been built up at great effort by manufacturers of quality local products.

Brussels, 1 July 1998.

The President of the Economic and Social Committee

Tom JENKINS

() This last statement was true thirty years ago. Technical progress and innovation have meant that a large part of the must not used for port wine is nowadays used in the production of high quality table wines.

() OJ C 298, 27.11.1989, p. 32.