EN Official Journal of the European Union CE 78/494

(2004/C 78 E/0515)

WRITTEN QUESTION E-3226/03

by Felipe Camisón Asensio (PPE-DE) to the Commission

(31 October 2003)

Subject: Reform of the tobacco sector

The Commission is proposing a considerable reduction in the direct aid received by the Community's tobacco producers, a cutback that is not echoed in any of the sectors recently reformed or awaiting reform. In the case of Spain, those affected calculate that, following this reform, they will receive an average of only 45 % of the total sum of direct aid from which they currently benefit, as the remaining 55 % will end up funding the restructuring measures. This cut in direct aid could threaten not only the survival of many farms, but also the future of tobacco production and the industries that make a living from it, with serious consequences for employment in regions like Extremadura, which are highly dependent on this activity.

The Commission justifies the reform on health grounds, arguing that tobacco consumption must be reduced. Since this is the noble aim of the Community's executive, it would make sense if it had some idea of what the drop in consumption would be following the reform of the sector. Can the Commission provide any rough estimation? Furthermore, given that the reform does not affect tobacco imports, does the Commission intend to introduce any tariff measures, for instance, to restrict imports to the EU?

Answer given by Mr Fischler on behalf of the Commission

(6 January 2004)

On 18 November 2003, the Commission adopted the proposal to reform the Common Market Organisation for Tobacco (1).

The reform proposal includes a full decoupling of the present direct aid to tobacco producers in three years.

The proposed reform will begin with the transfer of all or part of the current tobacco premium into entitlements for the single farm payment. This transfer will be complete for producers who have up to 3,5 tons of production, and are the most vulnerable producers with limited possibilities to shift to other crops. For the tranche between 3,5 tons up to 10 tons, 75 % of the current tobacco premium would be incorporated into the single farm payment. The remaining 25 % would feed the proposed restructuring envelope.

When implementing the reform for larger tobacco farms, the current tobacco premium, corresponding to the tranche above 10 tons, will be decreased by one third at each of the first two one-year steps and will at the third step be reduced to 45 % and incorporated into the single payment. In order to avoid major changes in income at agricultural holding level the remaining 55 % would be transferred to the restructuring envelope. Those larger producers will have a partial reduction in aid, but their size has better possibilities for a shift to other crops, and if this is the case they can in their reconversion benefit from the structural envelope.

The budget allocations to the tobacco sector will remain the same and the part which is not distributed as single payments will be transferred to a restructuring envelope. This will be utilised to contribute to improve the infrastructure and support to tobacco producers in particular who want to shift to other crops. In this respect, it should be noted that the funding in the envelope will be used in the tobacco growing regions in those Member States where they are collected.

The foremost justification for the Commission when presenting this reform has been to seek a long term perspective for the tobacco sector within the context of a sustainable agriculture. The 2003 Common agricultural policy (CAP) Reform approach effectively breaks the link between product and support, such that the single farm payment becomes a direct income support tool. On this basis, tobacco aid will be included into the single farm payment along with the premiums for other crops such as hops, olive oil and cotton. However, in addition, the Commission believes that greater coherence is needed, between the CAP and the Union's consumer, and public health policies. While the removal of product-related subsidies may not directly influence the short term prevalence of cigarette smoking, as was the finding of a recent Commission Extended Impact Assessment report (2), it is clear that a better coherence with public health policies is essential to maintain the confidence and trust of Union citizens.

On the question of the possible introduction of tariff measures for tobacco, the Commission has no intention and sees no reason to restrict imports of tobacco to the European Union.

(1) COM(2003) 698 final.

(2) COM(2003) 554 final also available on http://europa.eu.int/comm/agriculture/capreform