Table of Contents

1............ INTRODUCTION.. 6

2............ PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES. 7

2.1......... Organisation and timing. 7

2.2......... Consultation of stakeholders. 7

2.3......... Public consultation. 7

2.4......... Opinion of the Impact Assessment Board (IAB) 8

3............ POLICY CONTEXT. 9

4............ PROBLEM DEFINITION AND SUBSIDIARITY.. 12

4.1......... Problem context: is school intervention still relevant?. 12

4.2......... Problems that require action. 18

4.2.1...... The gap between the setting and the objectives. 19

4.2.2...... Missing "common identity" - lack of coordination and consistency. 21

4.2.3...... Deficiencies limiting the immediate impact of spending. 22

4.2.4...... Problem tree. 25

4.3......... Who is affected, in what ways and to what extent?. 26

4.4......... How would the problem evolve without a change in the policy?. 27

4.5......... The EU right to act and the added value. 28

5............ OBJECTIVES AND CONSISTENCY WITH OTHER POLICIES. 29

5.1......... Objectives. 29

5.1.1...... General objectives. 29

5.1.2...... Specific and operational objectives and targets. 31

6............ POLICY OPTIONS. 34

6.1......... Pre-selection of policy options. 34

6.2......... Description of policy options selected for the detailed impact assessment 35

7............ ANALYSIS OF IMPACTS. 39

7.1......... CAP 2020 – "status quo". 39

7.1.1...... Economic impacts. 39

7.1.2...... Social impacts. 43

7.1.3...... Environmental impacts. 45

7.1.4...... Budgetary impacts. 46

7.1.5...... Administrative costs and burden. 46

7.2......... Adjustment option. 47

7.2.1. Economic impacts. 47

7.2.2...... Social impacts. 48

7.2.3...... Environmental impacts. 48

7.2.4...... Budgetary impacts. 48

7.2.5...... Administrative burden and simplification. 48

7.3......... New framework option. 49

7.3.1...... Economic impacts. 49

7.3.2...... Social impacts. 51

7.3.3...... Environmental impacts. 52

7.3.4...... Budgetary impacts. 53

7.3.5...... Administrative burden and simplification. 53

8............ COMPARISON OF OPTIONS. 54

8.1......... Effectiveness. 54

8.2......... Efficiency. 55

8.3......... Coherence. 56

8.4......... The preferred option. 56

8.5......... Stakeholder's opinion. 57

9............ EVALUATION AND MONITORING.. 58

9.1......... Monitoring. 58

9.2......... Evaluation. 58

10.......... LIST OF ANNEXES. 62

LIST OF ACRONYMS

AB Administrative burden

ACM Accompanying measures

CAP Common Agricultural Policy

CEPS Centre for European Political Studies

CMO Common Market Organisation

DG Directorate General

ECA European Court of Auditors

EU European Union

F&V Fruit and vegetables

FAO Food and Agriculture Organisation of the United Nations

FFVP Fresh Fruit and Vegetable Programme

IA Impact Assessment

ISSG Inter-service Steering Group

MS Member State

NHA National Health Authorities

OB Organisational burden

PO Producer organisation

SFS School Fruit Scheme

SMS School Milk Scheme

USDA United States Department for Agriculture

WHO World Health Organisation

WTO World Trade Organisation

Executive Summary Sheet

Impact assessment on: Review of the CAP schemes providing agricultural products to school children

A. Need for action

Why? What is the problem being addressed?

CAP school schemes as currently implemented have certain weaknesses in their design and deficiencies in their functioning that need to be addressed, which limit their potential in achieving the objectives of promoting the consumption of agricultural products and healthy diets with school children. The problems identified concern the gap between the design of the schemes and their objectives (different educational tools under the two schemes), the lack of coordination and consistency between the two schemes and the deficiencies limiting the immediate impact of spending (high administrative and organizational burden on both schemes, budgetary under-execution of 30% in SFS, potential deadweight effect and low cost-benefit ratio in SMS). The drivers are mainly linked to the regulatory failures, different financial framework, different implementation in Member States and to some external factors.

What is this initiative expected to achieve?

In order to be able to meet the general objectives of increasing the consumption of F&V and milk products by school children (medium-term target is 15% increase in direct consumption and 5% in indirect consumption) and contribute shaping healthier diets, the following specific objectives are identified: · Refocus the current set-up towards the long-term objectives – in addition to the consumption targets, reach 15/20% of budget spent on educational accompanying measures · Contribute to reconnecting young citizens with food and its source – in addition to the consumption targets, reach 60% of accompanying measures dedicated to agriculture · Unify and consolidate the separate legal and financial frameworks and increase the visibility of the EU intervention · Increase the efficiency of spending – use the full potential dedicated to fruit and vegetables distribution; maintain and better target the current average take-up for milk

What is the value added of action at the EU level?

The action at EU level provides the funding necessary for initiatives across EU and additional sources of financing which permit Member States to expand the scope of their actions and increase their effectiveness. If Member States would have to rely exclusively on their own financial resources, most of them would not be in a position to implement ambitious initiatives. An EU framework has an added value in facilitating continuous knowledge, transparency, experience transfer and exchange.

B. Solutions

What legislative and non-legislative policy options have been considered? Is there a preferred choice or not? Why?

1 CAP 2020 – the status quo. It integrates the changes brought about by the CAP 2020 political agreement, by keeping two separate schemes and their financing arrangements while improving the strategic planning and strengthening the educational dimension for the SFS. 2 Adjustment. It aims at greater synergies between the schemes with one common strategy and communication measures, obligatory accompanying measures also for the milk schemes and synergies in different procedures. The financing models and the choice of products would be the same as under option 1. 3 New framework. It consists of a common legal and financial framework with regular distribution of fresh F&V and drinking milk and occasional distribution of other products through strengthened accompanying measures. It is based on a limited overall EU budget (with separate envelopes for fruit and vegetables and milk), no obligatory co-financing, limited fixed aid per portion and common monitoring and evaluation system. Option 3 is assessed as the preferred in terms of achieving the general objectives identified within an unchanged budget allocation and also the specific objectives. It is better set in terms of effectiveness, efficiency and coherence, with a common educational dimension, consistent approach, flexibility and targeting based on needs, lower administrative and organisational burden, enhanced impact on products that need promotion, coherence with public health objectives and highest simplification effect. Four following options were discarded in the process: "no policy" and "discontinuation of the SMS only" (not in line with the analysis concerning the need for continued school intervention); "new framework with a focus on socio-economically disadvantaged groups only", discarded as MS are better placed to target and prioritise their intervention; and "new framework with a regular distribution of a wider choice of agricultural products", discarded based on the public consultation outcome, proportionality and potentially high implementation burden.

Who supports which option?

Representatives of the Fruit and vegetables and dairy sectors prefer option 1 with some changes for the milk scheme. As concerns Member States authorities who expressed their view (12 in total), three prefer option 2, four prefer option 3, four were in favour of option 1 and one was undecided. Feedback from schools was limited concerning the preferred option. Out of 60% of the replies received, 23% favour option 2, 21% option 3 and 16% option 1. Concerning NGOs, option 3 is the preferred one with 42%, followed by option 1 with 26% and option 2 with 21%.

C. Impacts of the preferred option

What are the benefits of the preferred option (if any, otherwise main ones)?

Option 3, "new framework" is the most balanced in progressively refocusing the school schemes regime towards the long-term goals, enabling them to better respond to the overarching problems of declining F&V and milk consumption and rising obesity, and establishing a critical link with agriculture a variety of its products. It is expected to give the greatest impact of school intervention within a constant budget and bring greater efficiency in the use of the existing potential. Simplification has been an important consideration and should be enhanced in several ways, most of which will come notably through the simplification on the basis of Commission acts where certain requirements will be merged or removed (potential reduction of 30% of quantifiable obligations with additional reduction in the organizational burden).

What are the costs of the preferred option (if any, otherwise main ones)?

No significant economic, social or environment negative impacts are expected. Potentially there could be a reduction in the quantities of milk distributed due to the overall limit on the budget and subsidy rate (if MS or private contributions remain unchanged). Compliance costs are expected to be lower due to reduced administrative and organisational burden. The preferred option is budget neutral but requires nevertheless MS contribution for more ambitious scope.

How will businesses, SMEs and micro-enterprises be affected?

Farmers’ income and prices are not subject to significant impact but option 3 could bring a more level-playing field as regards the price of F&V distributed through a flat rate per portion, which could be felt by the producers if products are sourced directly from them. Short supply chains have the advantage to keep the value added within agricultural sector while bringing consumers closer to the source of food they eat. Producers and suppliers can also try alternative approaches in addition to distribution to schools and diversify their activities through their involvement in accompanying measures.

Will there be significant impacts on national budgets and administrations?

The removal of MS obligatory co-financing can be beneficial. However, it’s important that MS continue to contribute with national top-ups to enlarge the scope and integrate the EU funds as they cannot fund very ambitious programmes.

Will there be other significant impacts?

The only additional impact which is expected is significant simplification in the legal, financial and procedural framework.

D. Follow up

When will the policy be reviewed?

New common monitoring and evaluation requirements will be set up. The evaluation will be carried out both at the MS level with evaluation reports covering five years of implementation of the scheme, and also at the EU level with an external EU evaluation one year after the MS evaluations.

A review of the CAP schemes providing agricultural products to school children

1. INTRODUCTION

This Impact Assessment (IA) is set to review the legal framework governing the distribution of agricultural products in schools.[1] This process follows conclusions from the 2012 Report to the Parliament and the Council on the implementation of the School Fruit Scheme[2], where the Commission announced its intention of revisiting the school schemes "in order to assess the impact of the existing schemes and analyse if and how they should evolve in the future by considering different options, including a possibility of a new wider scheme".

There are currently two EU-funded school distribution programmes under the remit of the EU's Common Agricultural Policy (CAP) that specifically target children in school settings, namely the School Milk Scheme (SMS) and the School Fruit Scheme (SFS). Both schemes share a mutual aim to increase, on a lasting basis, the share of these products in children's diets at an early stage when their eating habits are being formed, thus contributing to the CAP objectives, in particular stabilising markets and ensuring the demand in the long run. Additionally, the schemes are in line with the wider public health objectives as they contribute in shaping the sustainable healthy eating habits.

While the schemes are embedded in the same objectives and focus on a similar target group, they operate within separate legal and financial frameworks and have some very important differences, which in practice do not allow for many synergetic effects. The CAP 2020 political agreement on the reform of the CAP includes certain changes aimed at improving the effectiveness of the school schemes and provides for possibilities for certain, albeit limited, synergies between them.

However, recent studies that have become available since the Commission's reform proposals were adopted, in particular the external evaluations of the SFS[3] and the SMS[4], have identified the need to make further improvements to both schemes to increase their management efficiency and effectiveness. The special report of the European Court of Auditors (hereinafter ECA)[5] recommends thorough reforms to remedy the weaknesses identified if the schemes, in particular the SMS, are to be continued. With this exercise, the Commission's services have also set out to explore whether it is sufficient to address the criticisms from different reports and evaluations within the current setting, or whether a broader and more unified policy response is needed to ensure that the long-term objectives that the schemes are pursuing are met.

This report does not prejudge the final form of any decision to be taken by the Commission.

2. PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES

2.1. Organisation and timing

To help bring together the range of expertise necessary for this assessment, an inter-service steering group (ISSG) was established. The group was chaired by DG AGRI and the following Commission services and Directorates General were involved in the exercise: LS, SG, SANCO, EAC, RTD, TRADE, BUDG, ENTR and ENV.

The work presented in this IA was conducted between October 2012 and September 2013, during which the ISSG held 7 meetings.

During the IA process, the recourse was made to public and stakeholder consultation, as summarised below.

2.2. Consultation of stakeholders

In addition to the public consultation, separate meetings and hearings were organised in the course of the IA process.

A joint ISSG and stakeholders meeting was organised on 15 March 2013. The meeting was intended to hear stakeholder's views on the consultation paper, in particular on two issues: the distribution of products and the supporting measures. Detailed minutes of the meeting are in Annex 1.

2.3. Public consultation

The preparation of this report has been preceded by a public consultation[6] which sought public response concerning the preliminary formulation of problems to tackle, objectives of the review and possible scenarios to reach the objectives. To this effect, the Commission services published a consultation paper which served as a basis for the consultation and it solicited input from the public through 9 open-ended questions. The consultation process stayed open for 12 weeks, until 22 April 2013, and was conducted on the basis of an on-line questionnaire and contributions received via email or post.

In response to its consultation, the Commission received 347 contributions from a diversified audience, in terms of stakeholder categories and geographical spread. The majority of contributions came from organizations or companies (37%), public authorities (34%) and citizens (23%). The majority of contributions originated in Poland, followed by Germany, Belgium, France and other EU or non-EU countries.

With the more detailed presentation of the outcome of the public consultation available online, the main messages which emerged from the contributions received can be summarised as follows:

· An overwhelming majority of contributions agree with the problems and challenges identified in the consultation paper. From the minority of contributions that could not go along with the Commission “diagnosis” of problems that need to be tackled, the arguments state that problems to be addressed by schools schemes appear to be too wide, moving away from the central focus of the current schemes. Few other opinions, on the other hand, believe that the analysis is too narrow, ignoring elements such as environment, health, poverty, larger dimension of food sustainability, etc.

· Several additional problems, objectives and options were put forward by the respondents, which were according to their opinion lacking from the consultation paper. Among the most frequently identified problems are administrative and organisational burdens resulting from the current schemes, which are perceived as excessive and deterrent, the unattractive participation conditions of the current milk scheme with its low subsidy level and lack of educational tools, as well as the overall lack of visibility for both schemes in the absence of an EU-wide communication campaign.

· The outcome of the public opinion on the preferred option did not yield an overwhelming support for any of the options identified in the consultation paper. On the contrary, the result was very balanced with each option receiving almost equal backing, with a slight preference for option 2 envisaging administrative synergies between the current schemes (36%), followed by option 3 suggesting a completely new framework for the school distribution (33%) and lastly option 1 based on an improved status quo (CAP 2020 reform) (31%).

· There is a broad recognition of the importance of accompanying measures since they were considered as crucial or important by 95% of the respondents. As regards to the key drivers for their success, several elements were put forward, most notably that there should be EU aid for these measures in order to increase their effectiveness; they should be evidence-based, adapted to children’s interests, have a long duration and repetition and involve different stakeholders (farmers, parents, teachers, community).

2.4. Opinion of the Impact Assessment Board (IAB)

The IAB provided its opinion on the draft of this Impact Assessment on 18 October 2013, together with its recommendations for improvements. The draft report was revised along the lines of Board's recommendations. In particular the following aspects of the report were improved:

- The problem context and definition was improved and clarified in order to better reflect the achievements of the current schemes, changes brought about by CAP 2020 reform and substantiate the identified problems.

- An additional effort was made to better explain the expected evolution of problems without further EU action and the EU added-value.

- The intervention logic has been reviewed, particularly with a view of better presenting and clarifying the objectives and targets.

- The description of options has been further clarified. Efforts were made to strengthen the assessment of impacts and provide for additional quantifications to the extent possible, in particular for the administrative burden. The comparison of options has been reviewed and substantially revised.

- Moreover, the revised report follows the Board’s advice to better reflect stakeholders’ opinions throughout the report.

This impact assessment serves also as an ex-ante evaluation, which is an evaluation conducted before the implementation of the intervention to make an appraisal of policy impacts.[7]

3. POLICY CONTEXT

Both the SMS and the SFS have their legal basis in the Council Regulation (EC) 1234/2007, Articles 102 and 103ga respectively. They developed independently and in different time periods. Detailed implementing provisions for the schemes are laid down in different Commission acts[8], but they contain very similar provisions pertaining to the general conditions for granting the aid, approval of applicants, payment applications, payment of aid, and controls and sanctions. Apart from these elements, the design and functioning of the two schemes is different, as illustrated in Table 1.

School Milk Scheme

The SMS was enacted in the legislation with the creation of the common market organisation for milk in 1968 and has been actually implemented since 1977. Created in the times of market surpluses (before the introduction of milk quotas in 1984), it was primarily intended to maintain or promote the consumption of milk and milk products in schools. This would in turn have a secondary effect of ensuring the consumption of a certain volume of milk products which would otherwise be added to the milk surplus and disposed of under other measures. Recital 43 of emphasises the primary goal of the scheme "in order to stimulate the consumption of milk by young people, the Community should defray a part of the expenditure occasioned by granting aid for the supply of milk to pupils in schools". At the level of the basic act, there have been no changes to the SMS since 2000 that would affect the basic structure and the key elements of the scheme (financing, educational tools and similar). The scheme was revised substantially at the level of the Commission act in 2008, and its nutritional and educational character was further strengthened. Recital 2 of Commission Regulation (EC) No 657/2008 specifies that the Scheme is implemented "in the light of the fight against obesity, and in order to provide children with healthy dairy products." The renewed version covers a wider range of dairy products, contains rules in relation to use of products in the preparation of meals and the maximum level of added sugars content, introduces a requirement for a school milk poster and is addressed to secondary schools as well.

The SMS has been implemented in 26 Member States in the last years, with Greece announcing its participation in 2013. As regards the scheme’s scale, the amount of subsidised products ranges between 300,000 and 410,000 tons with a minimum peak in the school years 2005/2006 and 2006/2007 and a maximum peak in the school year 2008/2009. The estimated number of children benefiting from the scheme ranges from 17 to 20 million annually. The respective annual EU expenditure for the scheme shows a similar development from about €50 million to €75 million with a maximum peak in 2008/2009. Biggest beneficiaries have been of the SMS in last years have been PL and FR with over € 11 million, followed by SE (€8.8 mio), RO (€7 mio), DE (€6.6 mio) and UK (€6.3 mio).

School Fruit Scheme

The foundations of the SFS were laid down in the context of the 2007 reform of the Common Market Organisation for Fruit and Vegetables. The Council invited the Commission to come forward with a proposal for a school fruit scheme to tackle the issue of falling consumption of F&V among children and rising obesity. Furthermore, the SFS was also mentioned in the 2007 "Strategy for Europe on Nutrition, Overweight and Obesity-related Health Issues"[9] as a good initiative to make a healthy option available to children. The scheme became operational from the beginning of the 2009/2010 school year. It is based on three “pillars”: the distribution of F&V products in educational establishments (ranging from nurseries to secondary schools), accompanying measures (to raise awareness about the importance of fruit and vegetable consumption and to strengthen the link with agriculture), and lastly the networking, monitoring and evaluation.

The Scheme has a steady participation of 24 Member States, with the exception of UK, SE and FI. Following the initial start-up difficulties in 2009/2010, which saw a modest use of available funds (38% of €90 mio available), the uptake of the scheme and its scale has increased in the following year (65% of the budget use in 2010/2011) and has remained more or less stable. Similarly, the number of children benefiting and the schools participating have stabilised at 8 million and 54.000 respectively. The biggest beneficiaries of the scheme in terms of the annual allocations for 2013/2014 school year are IT with over € 20.5 million, followed by PL (€ 13.6 million), DE (€ 12 million), RO (€ 4.9 million), FR (€ 4.7 million), HU (€ 4.5 million), ES (€ 4.4 million) and the CZ (€ 4.2 million).

Table 1 – Key elements of the SMS and the SFS

4. PROBLEM DEFINITION AND SUBSIDIARITY

4.1. Problem context: is school intervention still relevant?

The school schemes were established in order to promote the consumption of F&V and milk products, which are very important sectors for the European agriculture. Milk and F&V production represents a significant share of the value of EU agricultural output, with approximately 15% each. Besides their economic importance, they are beneficial in the public health context and are suitable for the distribution to school children.

The rationale which led to the establishment of the two school schemes is still relevant in the current context of declining consumption of F&V and milk products, as explained below, exacerbated amongst others by the modern consumption trends. Despite different health and agricultural promotion efforts both at the national and EU level to increase the consumption, particularly of fresh F&V, the declining trends have not been reversed.

Overall consumption varies depending on the products

The recent overall situation in the consumption varies depending on the products and also across MS, mainly due to different traditions, eating habits and culture. More details on the consumption are presented in Annex 2.

· According to Freshfel data, the consumption of fresh F&V is on the declining trend, falling by an aggregate 9.4% for fruits and 10.3% for vegetables in the period 2005-2010. It decreased by 3% in 2011 compared to the average for the previous period.[10] Rabobank note states that in many countries the combination of health promotion, trade expansion and marketing innovation has not resulted in the expected increase in consumption. On the contrary, the average per capita F&V consumption has actually decreased in large consumers markets, such as in western Europe, as well as in the US and Japan.[11] On the other hand, according to Profel the consumption of processed F&V has been stable over recent years.[12]

· The estimated consumption of drinking milk is on the declining trend in the medium-term (despite a period of stabilisation since 2010), with a 5% decrease in the period from 2003 to 2011[13]. The estimated overall per capita consumption of milk products, expressed in milk equivalent, also decreased by 5% in 10 years from 302 kg to 286 kg in 2011, even though for certain dairy products, such as cheeses, the consumption has even increased.[14]

Consumption among children

Consumption of F&V and milk products among children is difficult to measure and this analysis relies on the data acquired from available studies and reports. Various evidence points to the declining trends across different age groups, based on the conclusions drawn from the level of dietary recommendations met. Yet again, situation varies across age groups, MS and regions.

The results of the HELENA[15] study indicate that the average daily intake of F&V and dairy products among European adolescents is below recommendations[16] (boys reach only 30% and 40% of recommendations for fruit and vegetables respectively, while girls 35% and 50%, while for milk products 70% was reached by boys and 60% by girls). The evidence of insufficient F&V consumption is abundant. For instance, the pro-Children[17] project financed by DG RTD measures F&V intake by children in several EU Member States and found that only 17.6% of 11-year-old children reached the recommended levels. The percentage varied among sample countries between 7.8% and 24.1%. It showed that the consumption is low even in some of the Mediterranean countries.

Regarding milk products, the INRA survey demonstrates that in France an overall intake of dairy products declined between 1999 and 2007 by about 11% for children aged 3–14 years.[18] Several other studies indicate that the consumption among children is declining with age, as is the case amongst others in the UK and Norway. Norwegian research reveals that the reduction in milk consumption correlates with an increase in soft drinks intake.[19]

Emerging challenges

On-going economic and societal changes, such as urbanisation, exacerbate the shift in consumer preferences toward highly processed and convenience products, and facilitate a disconnection of consumers from agriculture in general, and from local and traditional food and environment in particular.

This tendency is expected to persist in the future, given that children particularly in urban areas are becoming increasingly disconnected from food, in particular local and seasonal, food traditions, and methods of agricultural food production. They are growing up not knowing where their food comes from – not just where it is produced, but also how it is produced with the work invested by farmers who make a living from it. F&V and milk compete with highly processed products which are promoted intensively by the food industry. This has been well described in 2005 by the FAO[20] overview of school milk programmes which points out that “... programmes which encourage children to choose milk and milk products should not be viewed only in the light of the actual volume of milk sold, but as an investment in the future demand for milk... Indeed, this would seem to be the only way that the milk industry can meet the challenge from competing beverages which are heavily supported by promotional campaigns”.

This increasing trend towards highly processed foods which are often high in added sugars, salt and fat is likely to continue, and will be boosted by the younger age groups. The evidence from various studies shows that children in all age groups from 4-16 years and across the MS have a preference for fatty and sugary foods. A considerable increase in adolescent consumption of ready-to-eat meals, such as snacks, sandwiches or hamburgers, occurred between 1999 and 2007.[21]

Thus, this shift in the food choices by a young population towards manufactured products, brought about by a host of technological innovations, responds to and creates demand, to the detriment of basic foodstuffs and the nutritional quality of diets. This results in a problem for the EU agricultural sector with the downsizing of the market and demand for these products. Additionally, it is also a public health problem because this trend is leading to nutritionally poor diets, and consequently to obesity and/or associated diseases.

The potential of the school intervention

When assessing the relevance of school interventions and their potential impact, they should be seen as a contribution, and not a solution in itself which will alleviate overarching problems such as the market situation in agriculture or public health challenges. Solutions to these multifaceted problems need to be sought in a larger synergetic effort of different instruments and policies. Agricultural objectives, to which the schemes contribute, are pursued through different CAP instruments. Obesity – as one of the major public health issues – is a complex combination of different factors in addition to the diet, like physical activity, family outreach, education and similar. Effort to increase the consumption of F&V and milk products are pursued also through other instruments.[22]

Unless substantial measures are taken, EU producers are expected to continue losing an increasing segment of their market, both in the short- and long-term, as the children of today become managers of their households in charge of purchasing the food, and pass on the weakening link with agriculture.

The schemes were designed to increase the demand through the increased consumption: directly, through the consumption of products distributed through the programmes, and indirectly, by influencing children's knowledge, attitudes and perceptions towards the products, thereby leading to an increased consumption outside the schemes (after school, on non-distribution days). Both mechanisms have a potential to create a lasting effect and sustainable increase in the consumption of fresh and minimally processed agricultural products in the long-run, and equally importantly (re)establish the critical link with agriculture and food. Additional potential impact of the schemes comes from the "spill-over" effect or multiplier effect that the increased consumption by children can have on parents and other adults involved in children's life.

Direct impact

The schemes are part of the market measures, as they contribute to the CAP objectives of stabilising markets by providing for a potential, stable market outlet and enhancing future demand. Given the extent of the intervention compared to the total value of F&V and milk production (€46 and €53 billion respectively), the overall impact of the schemes on the market resulting from the direct consumption through school distribution is rather limited on an aggregate level, as was confirmed by recent external evaluations (the volumes of products actually distributed in schools represent approximately 0.3% of the overall market volume for F&V and milk products). But individual impacts could be much higher, depending on the MS/region and their situation. The external SMS evaluation points out that for example in Hungary, the scheme directly increased milk consumption and helped to stabilise the dairy market. It is seen particularly as a market opportunity for small, regional dairies, as milk distributed under SMS makes up a big part in their supplies. For Romania the distribution of milk through SMS represents over 5% of the total milk supplied to dairies. This trend is confirmed by the US example where Farm to School programme reports[23] a 5% increase in income for participating farmers, resulting from its budget of 10 billion. But in individual cases these benefits can be larger, for example for one farmer in one study, sales to school district for a single popular fruit represented up to 40% of total direct sales. In addition to the income, reported benefits of the programme include increased market diversification, positive relationship with schools, parents and community, establishment of grower cooperatives to supply institutional markets, job creation.[24] From the world-wide perspective, the FAO document states that in many countries, the development of school milk programmes has been associated with the growth of the national dairy industry.[25]

Long-term impact

Over and above the immediate impact, the school schemes were conceived as a public investment in the future, as their success is embedded in the long-term and sustainable change in eating habits which would secure future demand of these products and contribute to reducing diet-related health problems. This impact is expected to be channelled through the educational dimension and influencing children's knowledge, perception and attitudes towards these products, leading to an increased demand also in the future once these children leave the programme. Ensuring and enhancing the future demand means higher sales and market opportunities for producers. As the SFS is a recent programme, it is difficult to judge if it has already had a long-term impact. The SMS has been implemented since 1977 but its recent external evaluation could not assess its long-term impact, concluding that the scheme focuses on the distribution and does not encourage other measures to form eating habits. However, the experience from the Irish Food Dudes programme which existed before the SFS and is based strongly on accompanying measures, points out to considerable and lasting increases in the consumption of F&V and generalised effects from school to home. Also the review of literature and experience from other countries demonstrate that this impact is achievable and important.[26]

Public health impact

The WHO document[27] states that by increasing the availability of F&V products, school fruit programmes can help build good eating habits, increase children’s well-being and thereby promote better health. As well as promoting good health, eating at least 5 portions of F&V a day can prevent cancer, coronary heart disease and other diseases. School milk programmes, on the other hand, may play an important role in decreasing the risk of osteoporosis later in life. Most milk and dairy products provide many different nutrients, essentially protein and calcium, which ensure the development of healthy teeth and bones particularly during the adolescent growth spurt. The achievement of peak bone mass during childhood is therefore crucial to reducing the risk of osteoporosis in later life.[28] School milk can also help pupils who come to school without having eaten breakfast to maintain their concentration level and prevent hunger before lunch time, which is also relevant from the socio-economic perspective.

Moreover, the interventions promoting healthy nutrition are instrumental in helping to prevent or reverse the adverse health effects of overweight and obesity. To fight childhood obesity, schools provide an opportunity to prevent the onset of obesity and related chronic diseases in later life. The evidence of the positive role of consuming sufficient quantities of fresh F&V in the prevention and fight against overweight and obesity is universally accepted and uncontested.

However, the role of some of the dairy products, especially of full-fat and high in calories products like cheese, in the fight against obesity has been debated extensively. The SMS can be an instrument in the fight against overweight and obesity due to the fact that a lot of milk products, like yoghurt of low-fat milk and with no added sugar, have lower energy content. Dairy products can also substitute and counterbalance unhealthy choices. But the effectiveness of the SMS as regards the weight management is influenced by the way MS implement it, in particular the choice of products to be distributed, portion sizes and children’s access to the products outside school.

Moreover, the schemes may contribute to the reduction of health inequalities and promote the balanced diets by socio-economically disadvantaged groups. The MS may through national strategies "target" their interventions and prioritise certain groups based on different criteria, amongst others on the basis of nutritional needs and socio-economic situation.[29]

Europe 2020 Strategy

The schemes are in line with the overall EU principles and targets as formulated in the Communication Europe 2020: A strategy for smart, sustainable and inclusive growth[30], through their contribution to health protection by helping shape healthy diets, to economic growth by helping to reduce health costs and to poverty reduction by providing food at schools free of charge in several economically disadvantaged regions/MS.

4.2. Problems that require action

Lessons learned

The current CAP school schemes have a unique approach in promoting agricultural products and healthy diets with school children through direct experience in tasting the products and learning[31]. As schemes with at least a medium-term perspective, they have an advantage over sporadic interventions which, according to certain scientific reports,[32] do not lastingly modify consumer preferences. As presented above, they have a potential to bring important benefits for agriculture and public health, especially in the long-run, with positive social implications.

Both SMS and SFS are popular with children and schools and also enjoy strong political backing[33]. Recent external evaluations in general confirm their relevance in achieving the stated objectives through their specific approach in reaching children in the school setting. A considerable experience with school programmes from across the world also testifies in favour of such an intervention, confirmed most recently by the evaluation of the US Fresh Fruit and Vegetable Programme[34].

However, despite this positive embedding and recognition of their potential, conclusions drawn from different reports (the ECA special report, the external evaluations of the schemes) and experience after years of implementation, point out certain weaknesses in the design and inefficiencies in the functioning of the current schemes. This merits a reflection whether the current set-up is still suitable to meet the set objectives and successfully address some of the emerging challenges that the schemes face, in particular in light of the evolution of the consumption patterns, as explained in the previous chapter. Furthermore, it needs to be seen whether such a gap in the design and functioning of the two schemes, which contributes to the fragmentation of the policy approach, weakens the effectiveness and visibility of the intervention. Finally, the efficiency of the schemes is affected by issues related to the financing arrangements and administrative complexities.

Three sets of problems have been addressed in this Impact Assessment, together with their drivers to the extent possible, bearing in mind the importance of improving the management efficiency and cost-effectiveness of instruments funded from the EU budget.

This review comes in the aftermath of the June 2013 CAP 2020 political agreement on the Commission proposal. The CAP already addresses some of the problems in the functioning and enables limited synergies, which has been taken into account in the definition of problems. It in particular addresses one of the main drivers behind the under-execution of the SFS budget, namely the low EU co-financing rate. The EU co-financing rates are increased from 50%/75% to 75%/90% (90% for less developed regions in accordance with the cohesion policy classification) in order to encourage higher take-up and improve budgetary execution. Moreover, the educational accompanying measures are added to the list of measures eligible for co-financing from the EU budget under certain conditions and within a threshold to be established by the Commission. Consequently also the overall budget was increased from €90 to €150 million per year. CAP 2020 brings limited changes to the SMS, with an obligation for MS to produce national strategies for the implementation. This to a certain extent addresses the problem related to the targeting of distribution. But it does not address significantly the problems identified below.

4.2.1. The gap between the setting and the objectives

As explained above, considering the fact that the direct "market" impact of the schemes is limited, a very important goal that both schemes are pursuing is the long-term impact and sustainable change in eating habits stemming from their educational dimension. Schemes operate in an environment which has been regarded as optimum for achieving such a change and at the age where eating habits are shaped.[35]

But despite the recognition of these objectives, they are addressed differently in the two schemes. Being a more recent intervention, the educational dimension was built into the SFS from the beginning, by making the participation in the scheme conditional on the existence of accompanying measures. On the other hand, SMS is a much older programme which has evolved over time. The educational goal of SMS was enshrined in the EU legislation in 2008 when it was reformed for the last time. However, despite this evolution, the set-up of the scheme has not evolved simultaneously.

Principally, the design does not provide for the compulsory use of specific educational tools. This not only impacts on its ability to reach the set objectives but it also creates greater divisions between the two schemes, especially in light of the changes CAP 2020 brings to the SFS. Furthermore, the financial arrangements of the SMS do not fully reflect the objectives, with a huge potential dedicated exclusively to the subsidising of products and no support for other measures (accompanying, communication, monitoring, evaluation). Also the overall size of EU funds dedicated to the SFS and the does not reflect the real needs in promoting the consumption, as explained in the previous section.

Specific problems presented below stem from the legal and financial framework of the current schemes, so the drivers for all the problems identified below are entirely regulatory.

(1) Missing specific education tools for SMS

Educational tools are important in bringing about a sustained increase in the consumption of distributed products and a change in eating habits, which are the objectives of the School Schemes. Scientific literature points out that the availability of products is crucial but is not enough - simply giving children a product few times a week or even every day may have little impact on their eating habits[36]. Evidence indicates that even traditional forms of nutritional educations in themselves are not sufficient either to bring about sustained changes (young children do not understand and react to concepts like “healthy”).

The SMS legislation does not oblige MS to use specific educational measures. With CAP 2020, they are enshrined in the EU legislation but remain voluntary. Nevertheless, 12 MS have included some kind of educational activities in their programmes, but those were often occasional and without a clear concept.

On the other hand, the SFS is equipped with specific educational tools which are nevertheless implemented in a variety of approaches and levels of ambition, as there are no specific EU rules on what constitutes a satisfactory accompanying measure. This is expected to be remedied to a certain extent by CAP 2020 changes which make these measures eligible for EU co-financing. Thus, at least minimum requirements as regards their implementation will be set at the EU level.

With these CAP 2020 changes, the gap between the educational settings of both schemes will be even greater.

(2) Weak link between the scheme and the products distributed under SMS

The ECA report states that in principle, the very existence of a subsidised distribution may help to convey a message about the value of the product in question, under the condition that the scheme is visible. The report furthermore points out that in certain cases neither the subsidy nor the product distributed were clearly visible. This is particularly evident in cases where the distribution of milk products is included in canteen meals. Efforts were done by the Commission in 2008 to exclude the use of products, subsidised under the scheme, in the preparation of meals, it did not solve all problems relating to the visibility of the scheme. Apart from the obligatory poster, which has to be displayed in a participating establishment, there is no obligation to make children aware in other ways that the scheme exists or that the product has been assigned a particular status. The SMS external evaluation considers the poster to be an insufficient tool to achieve this link on its own. This problem stems from the legal framework which does not set specific rules concerning the distribution modalities (for example outside regular meals) or information measures which would establish the link between the product and the scheme.

The SFS on the other hand obliges MS to distribute the products outside regular meals. If the distribution nevertheless takes place during the meal, the added value of the scheme has to be guaranteed.

(3) Weak evaluation and monitoring system

Monitoring and evaluation are systematic processes essential to evidence-based policies. When trying to assess the relevance of the schemes, especially in terms of their long-term impact, it has become evident that it is difficult to assess the effectiveness of the two schemes. The SFS is a relatively new intervention and it has put in place evaluation and monitoring requirements[37], but mostly uses output-based indicators monitoring the performance and not the effectiveness. Furthermore, the ECA report concludes that the SMS does not have an adequate built-in system for measuring its medium- or long-term effectiveness. It also questions the correctness of the available activity/performance indicators. This problem stems again from the legal framework which does not require national evaluations under the SMS and appropriate monitoring of outputs. Both schemes are also faced with an insufficient impact and result indicators.

4.2.2. Missing "common identity" - lack of coordination and consistency

The existing school schemes have developed independently and in general without consistency. This point was highlighted by the external evaluations, as well as the study on administrative burden performed by the Centre for European Political Studies (CEPS). They point to the lack of coordination between the existing two schemes which nevertheless pursue similar objectives and focus on similar target groups. The external evaluation of the SMS concludes that the connections between the two schemes are marginal and more coincidental than by nature. The ECA furthermore concludes that "there should be greater coordination and synergy between the two schemes in order to ensure a globally consistent approach to nutrition and that the programmes are managed efficiently".

Attempts were made in the past to consolidate the school distribution framework and find synergies, namely within the context of the recent CAP 2020 reform. The Presidency of the Council in 2012 initiated a discussion on this topic on the basis of the Presidency paper,[38] proposing modelling of one scheme on the other, which did not gain support from MS. The CAP 2020 allows for some synergies to be found in the practical implementation of the schemes (possible common strategies) but does not change the inconsistencies in the overall framework and functioning.

This type of approach does not stimulate management efficiency and has a negative impact on the effectiveness of the school schemes as a whole. . Separate systems bring about avoidable administrative burdens (see assessment and quantification in chapter 7) and costs associated with the implementation of the schemes. With CAP 2020 obligation of national strategies also for the SMS from 2015 onwards, it can be expected that the Commission will receive estimated 26 strategies for the SMS and 24 for the SFS. Additionally, the current fragmentation does not allow MS to strategically prioritise their school intervention for the products in question based on the nutritional needs (by region, age group, social status and similar) and operate their available budgets with flexibility.

The schemes are further lacking a "common identity" and are characterised by a low public visibility. This has been one of the most frequently raised elements in the public consultation process. The SFS integrates communication measures as eligible costs under the scheme but these efforts are different among MS and are often limited in their scope. This element becomes particularly important if compared to the activities linked to the promotion and advertising of "competition" products, such as soft drinks and confectionary, as explained in section 4.1 of this report.

Drivers:

The key regulatory driver behind this problem is the current legal setting of the schemes, with different legal provisions, distribution modalities, financing, procedures and other elements, which makes it difficult for MS to find synergies between the two programmes. In particular separate and completely different financing models act as a barrier to merge some of the procedures and reporting obligations, and they do not provide for the flexibility to MS to manoeuvre between the budgets based on their needs.

From the perspective of market drivers, the distribution of products in schools under both schemes is characterised by inherent differences both in products and in the supply system. Products themselves are very different, where milk products require different handling and equipment (in certain cases fridges), while F&V are highly perishable and price volatile. Similarly, the supply and distribution channels differ considerably. This cannot be solved with this review but there could be possibilities to explore whether the supply system could be integrated in the supply channel for school meals or similar, to the extent possible.

Finally, institutional deficiencies do not enable synergies, as in many cases MS authorities (units) managing the two schemes are different.

4.2.3. Deficiencies limiting the immediate impact of spending

(1) Execution short of its potential for the fruit distribution

While the overall dimension of the CAP school schemes is limited (compared to the total volumes produced and traded), their available potential has not been fully met. This applies especially for the SFS. Even 4 years after the start of its implementation, the SFS is still faced with a budgetary under-execution of around 30%. This lowers its potential impact on children (either in terms of a larger coverage or more intense intervention) and the volumes distributed. More details are presented in Annex 3.

The following drivers have been identified as being behind the sub-optimal performance:

– Financing conditions

The SFS is affected by the obligatory co-financing principle, which has been portrayed several times as one of the biggest challenges in the implementation of the scheme and a reason why certain regions within Member States have decided not to participate (for example in DE only 7 out of 16 lander participate). The situation is aggravated in MS or regions where public funds have to be replaced by private contributions. This is the case in France and Germany. Baden-Württemberg, with a public contribution of only 4%, has specific problems with regard to expanding its programme, whereas this is not the case for the neighbouring regions of Bavaria and Rhineland-Palatinate, which receive a public contribution of 50%. The CAP 2020 political agreement will significantly increase the EU co-financing rates, which is expected to improve the participation but it is not excluded that the potential will continue to remain under-executed, in particular in the present difficult economic situation.

– Administrative and organisational burden

Being a problem on its own, the administrative and organisational burden can act also as a driver contributing to the low use of potential in certain MS. This is in particular true in cases where the burden of implementing such a programme is disproportionately high compared to the level of EU aid received.

– Different implementation in Member States

As current school schemes are decentralised programmes, the practice shows that the success of a scheme often depends on the decision of MS on how to organise and implement their programme. This results in a variety of approaches and different success rates.

– Economic crisis

Notwithstanding the limits of this IA in addressing it, one of the drivers behind sub-optimal use of the potential has been associated with the economic crisis. This was especially felt for the SFS which is based on the principle of co-financing. Greece for example was forced to pull out of the SFS in 2011/2012 due to the difficulties in securing the co-financing part.

(2) Inefficiencies related to the SMS potential

On the other hand, the SMS execution has been approximately 65-75 million € per budget year. Considering the maturity of the scheme, it can be assumed that the scheme has reached its budgetary potential. But the ECA report emphasises the need to better target this potential, without increasing it. Moreover, according to the external evaluation of the SMS, this achieved potential could be compromised by the low cost-benefit ratio, caused by the low EU subsidy level in relation to the costs associated with the implementation. The ECA report points to other issues related to the low subsidy level, namely that it can in certain cases generate the "deadweight" effect as it does not permit distribution free of charge but extends only to the sale of product at a reduced rate. The latter potentially benefits children who would have chosen to buy the products even without the subsidy. In addition, it creates an additional organisational burden associated with the purchasing of products and collecting payments from recipients. According to the SMS external evaluation, additional potential for a deadweight effect to occur can come from the distribution model where products are offered or included in canteen meals (that would have been served even if unsubsidised) and is associated also with the products with an in-elastic price elasticity of demand[39] (for example pure drinking milk).

(3) Administrative and organisational burden

The level of administrative and organisational burden associated with the implementation of both schemes is perceived to be rather high, especially if this burden becomes disproportionate compared to the level of aid received and in relation to the scale of the scheme in MS. In relation to the later, the external evaluation indicates that the average administrative costs in Slovenia for the SMS amount to approximately €13.500 who has a very low participation of schools and pupils. This gives a very high administrative cost of over €23 per child, which is very high compared to the majority of other examined MS where this cost was under €1 euro per child.

The administrative burden is high on the administrative level (ministries) and for suppliers. For authorities responsible for the management of the scheme, the burden results mainly from the procedures related to the approval of applicants, execution of on-the-spot checks, record keeping, documentation and the implementation effort to install the scheme. For the SFS there is an additional requirement of national strategies and accompanying measures. Most suppliers under the SMS evaluate the burden, like providing the securities guarantees and applying for licences, as disproportionate.

On the other hand, schools are mostly affected by substantial organisational burdens which depend on the amount of obligations imposed upon them. The difficulties most often stem from organising the ordering and distribution of products (if this is not organised by the supplier), which can be quite heavy considering huge variety of eligible products, and the collection of payments from children or parents (under SMS, if not integrated in school fees).

Drivers behind this problem are different and often combined:

Regulatory: originating from the EU rules, including the ones on the eligibility of products, and/or additional national rules (sometimes more stringent than required). Some avoidable burdens come from the separate frameworks for SFS and SMS, which causes doubling of obligations (see analysis of impacts).

Institutional: depending on the MS decision on how to implement the scheme and the level of responsibilities entrusted to schools. In certain cases schools are even entrusted with securing and managing the contracts with suppliers. In most participating Member States and regions schools are faced with tasks related to the logistics and delivery of products, as well as managing their preparation and distribution to children. This is time-consuming and requires additional manpower. There are some positive examples where MS strived to reduce the burdens in the SFS: for example, in order to alleviate logistical difficulties, the Netherlands has reduced the number of suppliers. Consequently, the administrative efforts and control costs have been reduced. Poland introduced a flat rate per portion, which has had a positive effect on simplifying and streamlining the process of granting aid.

(4) "Where flexibility comes at a cost"

The Member States have, in line with the principle of subsidiarity, a wide margin to tailor the schemes to their needs (freedom in defining eligible products, the modalities of distribution, the frequency, accompanying measures and other parameters). But this can result in situations which hamper the functioning of the schemes. The CEPS study[40] concludes that in the case of SFS, more flexibility requires more documents, checks to ensure consistency, and most of all, financial soundness of the programme. Huge differences in approaches are reflected in particular in the price paid in individual MS/regions per portion or per kg. This review is not intended to limit the flexibility or the subsidiarity that MS enjoy, so this driver cannot be fully addressed. But the huge disparities in the prices paid under the SFS for similar products raise the question of the cost-effectiveness of distribution and the sound use of EU funds.

Example: The findings show that the ratio between the quantity of fruit and vegetable products distributed and the budgets spent varies significantly between Member States. In certain MS the price per kg of F&V distributed is €0.90, while in some other MS it can reach €6 to even €7 per kilo. The price per portion varies from €0.06 to €0.91. This price can be attributed partly to distribution costs, which vary considerably for a number of reasons such as geographical features (remote areas, islands), population density and the choice of products offered.

4.2.4 Problem tree

The following problem tree illustrates the "anatomy" of the causes and effects around the problems to be tackled:

4.3. Who is affected, in what ways and to what extent?

A wide range of players are affected by the deficiencies in the functioning of the current schemes. Firstly, school children are affected, as final beneficiaries of both schemes, by the inefficiencies which do not allow for the potential of the schemes to be fully used or well-targeted to achieve the maximum impact within the limited funds. Additionally, children do not benefit equally under the current schemes from the educational measures and activities which bring them closer to the food and its producers.

The current system affects in particular the schools which are at the forefront of this intervention, currently implementing either one or both programmes. They are faced with high organisational, and sometimes also administrative and financial burdens.

The Member States are also affected by the lack of synergies, where separate frameworks and rigid financing systems do not allow them to increase the management efficiency, rationalise their operations and have necessary flexibility in operating the distribution of different products. They are particularly affected by the administrative and control requirements which are sometimes disproportionately high compared to the benefits coming from the implementation of the schemes.

Suppliers and producers (farmers) are affected in several ways. Firstly, they face complex procedures and administrative requirements. Due to the low visibility and attractiveness of the schemes, they are often unaware of the advantages they have to offer, especially as additional untapped market opportunities. The producers in particular do not benefit in the same way under the two schemes from the opportunities that the educational measures offer, such as farm visits, which enable them to establish a closer link with children, parents and schools, and also to diversify their activities.

4.4. How would the problem evolve without a change in the policy?

The evolution of the identified problems in terms of economic, social and environmental impacts is assessed in chapter 7 under option 1 (CAP 2020) which represents a baseline scenario.

The continuation of the current CAP 2020 framework for the school schemes would negatively impact on the efficiency and effectiveness of the CAP school regimes, as it can be reasonably expected that the identified problems would continue to persist and would be even intensified over time.

The absence of obligatory accompanying measures will continue to weaken the effectiveness of the SMS. The educational dimension of the SFS is significantly improved by making these measures eligible for the EU co-financing which is expected to improve their quality and impact. The next wave of national evaluations in 2017 will evaluate their effectiveness and provide the results that will be used to improve the framework, if necessary. On the other hand, this would even widen the gap between the two schemes, as the SMS would continue with the voluntary accompanying measures. The evaluation system of the current SMS would not be able to provide the evidence-based results that would support the future decisions. Similarly, the low visibility will persist, to the extent that the link and recognition of the scheme will be further weakened.

The external evaluation of the SFS questions the efficiency of distribution in certain Member States, with the costs of products being even 600% or more, higher than in most of the other Member States. This problem is expected to continue if no change in the policy is foreseen. CAP 2020 increased co-financing rates for the SFs are expected to improve the use of the financial potential and reduce the under-execution.

The SMS evaluation, the ECA report and many contributions from the public consultation emphasise that the level of EU aid in the SMS covers only around 10% to 25% of the product's price (without taking into the account the costs related to the provision of services, such as transport, packaging and other logistics). In most Member States, due to slightly but continuously increasing milk prices, the share of the EU subsidy in the selling price for children has simultaneously been decreased over the last decades. In the Netherlands, the subsidy rate decreased significantly over the years, from about 27% of the price of whole milk in 1997 to about 10% of the price in 2012. Compared to the efforts and costs associated with the implementation and management of such a school programme, the cost-benefit ration for schools is very limited and is acting as a disincentive for participation. This in addition triggers the conditions for the so-called deadweight effect of the Scheme, as explained in chapter 4.2.3. This situation is expected to continue in coming years and could be even worsened should the projected milk/dairy prices increase, possibly increasing the deadweight effect and hampering the distribution to the groups with high nutritional needs.

The administrative burden associated with the management of the schemes is examined in chapter 7. The "no change" in the policy would mean the continuation with the complex separate systems that do not allow for the management efficiency and negatively impact also on the effectiveness of the schemes.

4.5. The EU right to act and the added value

The EU right to act in this field is set out in several articles of the Treaty which make provisions for the CAP. Article 38 stipulates that "the Union shall define and implement a common agriculture and fisheries policy", with objectives of the CAP set in Article 39 and further provisions in Articles 40-44. Both the school fruit and school milk scheme were designed to bring young consumers to appreciate F&V and milk products, thus contributing to stabilising and enhancing respective markets in accordance with the CAP objectives.

Moreover, Article 168(1) of the Treaty requires that a high level of human health protection be ensured in the definition and implementation of all EU policies. With their health benefit potential, the current instruments are an example of the role that CAP can play in shaping a healthy diet, by integrating the health-related issues in the design and implementation of its policies.

The justification for EU action from the subsidiarity stand-point was already analysed in the IA which led to the establishment of the SFS. The analysis below demonstrates that the justification for EU action put forward at that time could be to a large extent applied also in the context of this review, which does not entail an expansion of the EU action. Moreover, some of the arguments in favour of the EU action put forward at that time were subsequently confirmed by the external evaluations, as explained below.

The overarching problems that underpin the action at the EU level in respect of school schemes affect many Member States. The continued declining consumption of F&V and milk products as well as the changes in consumption patterns towards highly processed products are a common phenomenon in the EU. So are the rising levels of overweight and obesity among children. These problems necessitate the EU involvement, as it has been shown in external evaluations that most MS would not be able to tackle them through their own resources, either at the national or regional level. Prior to the EU involvement in this area, some MS were implementing national programmes aimed at increasing the milk and/or F&V consumption, for example the UK milk scheme, the Irish "Food Dudes" F&V programme, "TuttiFrutti" in Flanders, and "Un fruit pour la récré" in France. The EU framework for the school interventions does not call for the abolishment or substitution of national initiatives. On the contrary, EU intervention is designed to enrich and strengthen existing national initiatives, especially through additional sources of financing which permit MS to expand the scope of their actions and increase their effectiveness. The legislative provisions provide for the clear rules that prevent crowding out of national funds for pre-existing programmes, as the EU funds cannot be used to replace funding for any existing national school schemes but can be used in order to extend or make more effective a scheme that already exists.

But a number of elements confirm that action at EU level is appropriate and provides an added value:

An EU framework provides first of all the funding necessary to implement valuable initiatives across the EU. If MS would have to rely exclusively on their own financial resources, most of them would not be in a position to implement ambitious initiatives, especially "poorer" regions or MS. The latter is confirmed by the external evaluations of the current school programmes. Both the SFS and SMS evaluations conclude that almost all participating MS state that only with the common EU framework and its financial involvement it was possible to set up large-scale and nation-wide schemes. For example Germany ran a pilot project in F&V distribution in Dortmund, the Netherlands a small-scale programme from 2003-2005 but a nation-wide distribution was not feasible due to budget restrictions. The authorities in Spain, Hungary and Latvia explicitly stated that a SFS would not have been possible without EU aid. A similar situation applies also for milk, where 89% of interviewees stated during the evaluation process that the initialisation and implementation of the SMS would not be possible without the EU subsidies.

Furthermore, beyond its financial importance, the evaluations conclude that the EU framework has led to greater credibility of programmes in MS, visibility of the schemes, as well as an improved image and awareness of the EU.

A lack of EU action and the continuation of activities exclusively at the MS level would create a risk of discrimination between producers in those countries that do not have an access to the school schemes as a market outlet. Despite the limited direct economic impact of school schemes on the producers' income, the latter would not be able to benefit from establishing close links with schools as potential market for their products, children as consumers and future household managers and long-term benefits this connection can bring. The EU involvement gives the necessary impetus to MS to participate with its financial backing, thus providing for a more level-field access to these institutional markets. The EU regime produces additional added-value on top of already existing national schemes as it leads to a continuous knowledge, transparency and experience transfer among participating MS. Currently the SFS provides for this exchange via its dedicated website and annual extended stakeholders meeting (MS, sector, NGOs …).

At the same time, for the policy to be effective a certain degree of flexibility is necessary in its implementation to allow Member States to adjust the policy to local needs. The school regimes respect the subsidiarity principle, with the participation of MS in the schemes being optional and a wide discretion given to MS in designing and implementing their schemes (choosing the target groups, list of products, models of distribution and similar).

5. OBJECTIVES AND CONSISTENCY WITH OTHER POLICIES

5.1. Objectives

5.1.1. General objectives

The general objectives which were set for the schemes remain valid. That is primarily to durably increase the share of F&V and milk products in the diets of children at the stage when their eating habits are being formed, thus contributing to the CAP objectives of stabilising the markets and ensuring the demand in the long run. This increase can come directly through the consumption of products distributed under the scheme, and indirectly through out-of-school consumption on account of the knowledge acquired via educational measures. They are both expected to generate sustainable and long-term impacts. The consumption increase translates itself in the increased demand for agricultural products and income for producers.

The school schemes are also in line with the CAP general and specific objectives defined for the CAP post 2013, in particular with specific objectives of maintaining market stability whilst meeting consumer expectations, enhancing farm income, improving agricultural competitiveness and enhancing its share of value added in the food chain, and fostering innovation. Additionally, the schemes aim to contribute to the wider public health objectives of reducing overweight and obesity, and diet-related diseases by shaping the sustainable healthy eating habits.

Measurable and time-bound targets have not yet been set for the two schemes. Based on the experience acquired so far and the results of the evaluations of other international programmes, the following targets appear as attainable. The medium-term progress would be checked against the objectives after a 7- year period through an EU external evaluation, taking into account national evaluations covering 5-year periods.

– The target is to achieve a 15% increase in the direct consumption of F&V and milk products arising from the school schemes and the distribution of products. This is an attainable target and it is based on the available results from some of the national evaluations which measured the direct impact, as well as the US evaluation of their programme.[41] This target would have different impact in Member States, as the current consumption of F&V and milk varies across Member States, regions, age groups, gender and products (for example generally higher consumption of fruit than vegetables).

– The targets for the indirect consumption (out-of-school or on non-distribution days) are difficult to set, given the limited experience in measuring such impacts and given the number of external factors that contribute to consumption patterns. But according to some of the national SFS evaluations and the US experience[42], it is reasonable to expect 5% increase in indirect consumption for children participating in the schemes.

– As concerns the general public health objectives, a target cannot be directly set at this stage. However, data on public health from Eurostat, especially concerning the Body mass index and consumption patterns, will be of help when assessing the possible contribution in terms of health linked to the implementation of the school schemes.

5.1.2. Specific and operational objectives and targets

With a view of providing an effective and efficient framework to reach the overall objectives and to address the emerging challenges identified in section 4.1, the specific objectives of the review are identified below. They can be translated into the operational objectives to be achieved through different measures.

(1) Refocus the current set-up towards the long-term objectives, with a view of equipping the schemes with the educational tools which are a pre-condition for reaching a sustainable impact on the consumption and bridging the gap between the educational dimensions of the two schemes. The target in terms of effectiveness of the educational measures has been set under the increase in the direct and in particular indirect consumption. Additional target is to reach a level of 15-20% for accompanying measures out of the budget used (versus the current 5% spent on accompanying measures in the SFS and not known for the SMS).

(2) Contribute to reconnecting young citizens with food and its source, thus enhancing perceptions of agriculture and its products, the CAP and the EU. The target is to achieve increased knowledge, attitudes and preferences by reaching a target of 60% of eligible accompanying measures dedicated to agriculture and agricultural products out of the total number of measures implemented.

These two specific objectives translate into the following operational objectives and measures:

(1) Boost and consolidate the educational dimension of the current regimes. This could be done by providing for compulsory educational tools, integrating various agricultural products and agri-related active measures (meet the farmers, etc.) within the context of educational measures and by providing guidelines on their implementation. As these measures are important in bringing about a sustained increase in the consumption of F&V and milk products and a change in eating habits, they relate directly to the public health objectives of shaping healthier diets and preventing diet-related diseases.

(2) Increase the link between the products and the scheme (the EU added value), by reviewing the modalities of distribution to increase the visibility and EU-added value and the requirements of information tools to accompany the distribution.

(3) Develop a common evaluation methodology for the EU and MS evaluations and annual monitoring of outputs, by introducing obligatory national evaluations over a 5-year period (which enables the evaluation of medium-term impacts); improving annual monitoring reports and by developing impact and result indicators to measure the long-term impact (through an ad hoc study).

(3) Unify and consolidate the current separate legal and financial frameworks and increase the visibility of the EU intervention, in order to ensure a globally consistent CAP approach to school distribution and maximise the management efficiency. The target is to have one common strategy per MS involved in the distribution of both products and to increase the visibility of the EU intervention.

The operational objectives and measures would be to:

(1) Increase synergies between the current two schemes and their management efficiency. The objective is to encourage Member States, which are better placed to act in this area, to reflect and have better overview on how to prioritise their school intervention for the products in question based on the nutritional needs (by region, age group, social status and similar). Apart from the CAP objectives, this would contribute also to meeting the general public health objectives, in particular on reducing health inequalities.

(2) Increase the visibility of the EU schemes by designing an EU-wide communication campaign and dedicated website.

(4) Increase the efficiency of the spending dedicated to the promotion of the consumption of agricultural products in schools, where the financial potential of the schemes would be better targeted for the maximum impact and the cost-effectiveness of distribution would be increased. In terms of the expenditure for the distribution of products, the target is to use the full potential dedicated to the F&V distribution annually. The target for the milk expenditure is to maintain the current average take-up and avoid significant decreases. The target for the reduction of administrative and organisational burden is to reduce the information obligations and processes by 30% for Member States and beneficiaries, which will increase the cost-benefit of implementing the schemes.

Operational objectives and measures corresponding to this specific objective are to:

(1) Improve the conditions affecting the use of the budgetary potential by revisiting the financing arrangements linked to the functioning of the SFS and the SMS.

(2) Simplify the legal framework and reduce the administrative/organisational burden by reducing the number of procedures and obligations to the extent possible, by streamlining the products involved in the regular distribution, and by providing guidelines on "best examples" and the exchange of experience.

The progress towards achieving the objectives identified above would be steered using quantified impact and output indicators in the context of reforming the monitoring and evaluation framework described in section 9 of this report.

Table 2 – Intervention logic

6. POLICY OPTIONS

With the intention to meet the objectives set out in the previous section, the Commission services have analysed different policy options.

6.1. Pre-selection of policy options

A screening of different policy options has led to the identification of those policy options that are likely to meet the objectives the best and are in line with the relevance analysis from section 4.1. As a result of this evaluation, three policy options will be pursued in the impact assessment, as described in the following sub-chapter. These will be further assessed regarding their environmental, economic and social impacts.

The following policy options were, however, discarded as they were judged not to be reaching the set objectives and not in line with the analysis done in the IA so far (relevance):

– Discontinuation of the intervention at the EU level (no policy), whereby the promotion of the consumption of F&V and milk products would be pursued through other existing interventions (general AGRI promotion, F&V CMO promotion). This option was discarded based on the analysis concerning the need for continued school intervention. All of these measures have the potential to contribute to reversing the declining consumption of certain F&V and milk products but they employ different approaches and procedures. As explained in footnote 15, the school schemes are a different type of intervention than pure promotion, as they apply a balance between tasting/availability of produce and educational measures, which is scientifically upheld to be very effective. Even more importantly, they guarantee the continuity and regularity of intervention, which is important for reaching the set objectives.

– Discontinuation of the SMS programme only, whereby the only school intervention pursued would be the SFS. This option was ranked very poorly based on the screening criteria and in light of the analysis done on the relevance of continued intervention (section 4.1).

– New framework, focused exclusively on the disadvantaged socio-economic groups, which was discarded as the member States are better placed to decide on their target group according to their needs, which allows the measure to better achieve its goals.

– New framework with the regular distribution of a wider choice of agricultural products, in addition to the current F&V and milk products. This option was considered to be positive as regards the reconnection of children with agriculture and the variety of its products, but was discarded as it would be operationally difficult to implement and not proportionate (additional organisational burden for schools). Similarly, the public consultation feedback and the discussions with some MS did not show significant support for this option. In particular the MS were more interested in the occasional and limited (more educational) involvement of other products through accompanying measures.

6.2. Description of policy options selected for the detailed impact assessment

The scale and nature of all considered options are consistent with the budget allocation foreseen in the CAP reform and budgetary neutral to this. In line with general concerns expressed in the public consultation about all options, an EU-wide communication campaign would be envisaged for all options to bring visibility to the CAP school regime, bring it closer to children with communication tools, and promote EU initiatives in the area of health, food, agriculture and physical activity. Existing communication measures have been predominantly nation-wide and with a limited reach.

Option 1: CAP 2020 – the status quo

The status quo option already integrates the changes brought about by the CAP 2020 political agreement. The main elements under this option are the following:

– The current situation with two separate schemes is kept, as well as the different financing arrangements.

– The budget of the SFS amounts to €150 million per year, with higher EU co-financing rates (75%, or 90% for less developed regions). Accompanying measures under SFS remain obligatory but eligible for EU co-financing up to a limited threshold.

– The provisions pertaining to the SMS introduce a more strategic planning and approach to distribution through the obligation for MS to draw up national or regional strategies. Accompanying measures for the SMS are voluntary. The financing arrangements are kept unchanged, with the EU contribution limited to the aid per product (€18.15/100kg) and no overall ceiling on the EU expenditure.

Stakeholders' views

The main fear of the milk sector representatives and some Member States was that, under this option, the shortcomings of the current school milk scheme would persist, especially the lack of educational measures, low visibility and low level of aid. The sector representatives in particular were concerned that this would limit the development and effectiveness of the school milk scheme compared with the school fruit scheme. The representatives of F&V sector did not raise many concerns about this option, apart from a request to better define educational accompanying measures and increase the visibility of the Scheme at the EU level.

Option 2: Adjustment

This option is set to explore whether the objectives set in Section 5 could be achieved within the current setting but through the measures/changes aimed at bridging the gap in the educational dimensions of the current schemes, increasing the synergies between the two schemes, further simplification and improvements to the programmes beyond CAP 2020. This option would as well maintain the separate financial and legal framework and the CAP 2020 financing arrangements, as well as the choice of products distributed. It would entail a revision of certain elements of the SMS, while the key elements of SFS would be largely unchanged compared to CAP2020 option, as the latter bring already significant changes.

Greater synergies and simplification between the schemes could be achieved by means of:

– Regulatory requirements set at the EU level, such as a requirement for a common strategy for both schemes, including obligatory accompanying measures for SMS, targeting, common communication measures (common poster, campaigns), merger of administrative requirements related to the aid applications, controls and other procedures;

– Practical synergies which Member States could achieve themselves (subsidiarity) in the organisation and logistics of distribution, controls and reporting and similar;

– Exchange of experience through joint annual meetings of authorities in charge of implementation and stakeholders, as well as through the creation of a common Group of Experts providing technical and scientific advice to the Commission (both are in place for the SFS).

This option would foresee the requirement of accompanying measures also for the SMS, with a strong educational and awareness-raising dimension, connecting children with agriculture, food, local community and producers, as well as with environment (avoiding food waste) and nutrition/health issues (balanced diet, healthy eating habits). Due to the different financing models of both schemes, where SMS aid per kg does not allow for any other measures to be co-financed, these measures would have to be financed from national funds, as was the case for SFS pre-CAP2020.

Stakeholders' views

The most frequently raised issues were difficulties in finding synergies between very different programmes and products (logistics and distribution). Many Member States and also the sector were united that option 2 does not provide for EU financing for supporting measures for the milk scheme and that the EU subsidy for milk is still low. They identified the continuation of the current school milk scheme financing model as a problem. They stated that because there is no overall envelope but aid is given per kilogram, there is insufficient flexibility in the scheme. Few national/regional administrations pointed out that some administrative procedures cannot be merged because of the different natures of the financing models for each scheme, with the risk of reducing the impact/reach of one or the other scheme.

Option 3: New framework

This option examines whether a common legal and financial framework should be established for the provision of agricultural products to children in schools. It would bring a more unified approach to the CAP school regimes, which would be strongly oriented towards the long-term objectives through common educational measures, while the distribution would be better focused on priority needs/products. The CAP2020 orientation to the products coming from direct purchasing and short supply chains, taking into account elements such as seasonality and environmental considerations, would be kept. The common framework, which would be voluntary for MS and well-targeted through a national/regional strategy, could be based on the combined use of the following elements:

i) Strengthened educational dimension through common accompanying measures to accompany the distribution of products. The Commission would to draw up a framework (list of eligible measures and costs to ensure proper financial management and control of expenditure), leaving the Member States the choice of particular solutions that suit best their reality and fit with their educational systems. They would have a strong educational dimension, with a focus on agricultural issues (for example seasonality of products), nutrition/health (balanced diet, healthy eating habits) and environment issues (avoiding food waste, environment-friendly packaging and related environmental matters). In addition, they would provide a critical instrument to (re)connect the children with food, agricultural production, farmers and local heritage. The eligible measures and a list of limited products that could be involved occasionally in thematic measures would be defined in cooperation with the scientific expert group and left to the choice of MS (and its health authorities) based on their traditions, cultural preferences and in line with national health standards and criteria. The measures would most likely cover some of the popular measures, which are acknowledged to be effective, such as farm visits, gardening sessions, "meet the farmer" days, tasting sessions of different products to enrich children's tastes for fresh and minimally processed agricultural products, thematic days (traditional breakfast), etc. Apart from educating, these measures give children hands-on experience with agriculture, and sensory education to enrich their tastes and attitudes towards different products.

ii) Limitation of the distribution of products in schools to two "core products": fresh fruit and vegetables and drinking milk only. The fat content of drinking milk would be decided upon by national health authorities. This focus would be beneficial for several reasons:

- since the distribution would take place within the limited budget, it would reduce organisational burden for schools,

- it is in line with the need to help reverse the declining consumption trends for these two groups of products, as section 4.1. of this report establishes the declining consumption in particular for fresh F&V and drinking milk, while the consumption of cheese has increased,

- additionally, this would be in line with the overall practice, as fresh F&V products and drinking milk are the most distributed products under the current schemes in the majority of MS[43].

iii) Common financing framework, with:

– A limited overall EU budget dedicated to the school schemes that would reflect the CAP 2020 "acquired rights" for the schools schemes. Taking into account the concerns of stakeholders, the budget for F&V (€ 150 million) and milk (€80 million) would be kept separate. The limitation on the overall budget earmarked for the milk distribution is new and is justifiable based on the maturity of intervention and its stable performance over the years. Considering the differences between the products and their supply chains, as well as the different consumption situation across the MS, separate "envelopes" would be allocated to MS for F&V and milk. Certain flexibility would be provided for, where MS could transfer their "entitlements" between the envelopes based on their needs (prioritising of intervention through strategies). Within those envelopes, thresholds would be established for other eligible measures, such as evaluation and monitoring.

– Based on the experience so far, the level of EU contribution towards the cost of products would be limited through a fixed aid per portion for F&V and aid per kg for milk. This would abolish the principle of co-financing for the SFS, which would also help alleviate the huge disparities in the price for products distributed and would imply a simplification in terms of a management. The level of EU subsidy for the milk would be increased in order to reduce the deadweight effect (by enabling the distribution free of charge or close to it) and increase the cost-benefit of distribution. Within a limited overall budget, this would mean focusing the resources on a narrower target population and prioritising of intervention to maximise the impact.

Stakeholders' views:

The main concern of the sector concerning the new framework was that with the merger the distribution of one or the other product would be jeopardised and the impact of the current schemes would be reduced. This view was particularly prominent among fruit and vegetable stakeholders who feared that the newly acquired budget under CAP 2020 would be reduced on account of milk and that the “image” of fruit scheme could be compromised. Member States feared that if the budget for the new framework would be common, the F&V and milk sector would put lot of pressure on national administrations to allocate more for one product or the other. In addition, several contributions emphasised the differences between the products and the logistics of their supply.

Table 3: Overview of problems, objectives and options

7. ANALYSIS OF IMPACTS

When analysing certain impacts, in particular those arising from the consumption of products provided through the school schemes, it is difficult to fully assess their final or "real" impact. Other "competing" promotion activities, such as those for sweets or soft drinks, could be intensified and in turn counterbalance or diminish the impacts arising from the school promotion.

7.1. CAP 2020 – "status quo"

This scenario already integrates the changes which will be brought about by the CAP 2020 reform to the school distribution. Therefore, it can be considered as an improved status quo and a baseline for the assessment of other policy options.

7.1.1. Economic impacts

The economic impact of this scenario mainly comes through the immediate effect on the demand for F&V and milk products arising from the school intervention, predominantly coming from the direct consumption of products provided in schools and indirectly, by influencing children's knowledge, attitudes and perceptions towards products in question.

- Direct and indirect impact on the demand

School Fruit Scheme

The increased funding for the SFS to €150 million per year will likely yield a higher immediate impact on the market in terms of volumes distributed, generating the direct increase in the demand. However, the new budget is not exclusively used to increase the scope of the scheme in terms of the volumes distributed, especially due to the eligibility of accompanying measures for EU co-funding and the raise in the EU co-financing levels.

The table in Annex 5 illustrates the likely impacts of the CAP 2020 reform in financial terms and consequently impacts on the market in terms of the volumes distributed. The calculations show that the potential output is around 75 400 tons. It can be assumed that the uptake of funds (and consequently the output) will be better under this option, given that CAP 2020 addresses some of the drivers identified as hampering the uptake (SFS co-financing rates). The majority of these funds and volumes will be channelled to fresh F&V, which are predominantly distributed under the SFS. However, the impact depends on a case by case basis. The share of processed F&V varied from approximately 1 % in North Rhine-Westphalia to 62 % in Slovakia.

An additional impact is expected to come "indirectly" though increased consumption of F&V outside of school and on days outside of distribution due to the acquired experience and knowledge (via accompanying measures). The recent US evaluation of FFVP concludes that students participating in the programme consumed slightly, but statistically significant, more fresh F&V outside of school (0.06 cups or 3%) than did students in schools not participating in the programme, providing some evidence that such programmes may also indirectly increase fruit and vegetable consumption. What should not be neglected in the analysis of potential impacts of the school distribution is the potential to create spill-over effects or the multiplier effect. The impact of the school distribution can go beyond the participating children and have a positive influence on parents, mostly with regard to their attitudes towards their children's diet – for example by providing more F&V products in lunch-boxes, variation and availability of those products at home and potentially even on their own consumption.

Furthermore, given that CAP2020 orients the distribution towards the products of EU origin[44], to the extent practicable, and particularly to local purchasing, local markets and short supply chains, it is possible that the above impact would be felt more prominently by local producers which could find an additional "niche" for