WRITTEN QUESTION E-2580/01

by Jules Maaten (ELDR) to the Commission

(24 September 2001)

Subject: Environmentally harmful subsidies, with particular reference to the Rio+10 Conference and agriculture and fisheries

1. Environmentally harmful subsidies are those granted with a particular objective, often unrelated to the environment, but which may have unintended negative side-effects on the natural and social environment. In the framework of the EU's preparations for the Rio+10 Conference in Johannesburg in September 2002, questions about such subsidies arise in the fields of agriculture, energy, fisheries and road transport. In a general way, is the Commission prepared to undertake the abolition of environmentally harmful subsidies as part of the Rio+10 Sustainability Plan?

2. It appears from a study by Van Beers and De Moor (Public Subsidies and Policy Failures. How Subsidies Distort the Natural Environment, Equity and Trade, and how to reform them, Edward Elgar Publishers, Cheltenham, UK, 2001) that in 1996 some 50 % of all agricultural subsidies in the EU took the form of price subsidies. Price support in particular encourages farmers to work the land too intensively with artificial fertilisers, pesticides, etc. in order to maximise their subsidy income. Is the Commission convinced of the ineffectiveness of input and price support in the agricultural sector and of the additional harmful environmental effects.?

3. Does the Commission agree that the phasing out of subsidies which lead to economies of scale in the fisheries sector results in the release of further resources which can be used to buy out fishermen, leading to a reduction in the number of fishermen, and will the EU launch a study on the extent and harmful effects of fisheries subsidies including their effects on international trade?

Answer given by Mrs Wallström on behalf of the Commission

(20 November 2001)

The Commission in its Communication(1) A Sustainable Europe for a Better World: A European Union Strategy for Sustainable Development stressed the need to remove subsidies that encourage wasteful use of natural resources as a means to get prices right and to influence the behaviour of individuals and businesses.

In this Communication it was specifically proposed:

- To phase out subsidies to fossil fuel production and consumption by 2010. Analysing, among other things, whether or not a minimum level of subsidised production for security of supply reasons should be maintained;

- To improve the agri-environmental measures in the mid-term review of the Common Agricultural Policy, so that they provide a transparent system of direct payments for environmental services;

- To remove counterproductive subsidies which encourage over-fishing in the 2002 review of the Common Fisheries Policy;

- To ensure, through a framework for transport charges to be proposed by the Commission in 2002, that by 2005 prices for different modes of transport, including air, reflect their costs to society.

The Common Agricultural Policy (CAP) reforms undertaken as part of the Agenda 2000 provide a powerful impetus for the integration of environmental concerns into agricultural policy together with a considerable range of instruments to achieve sustainable agriculture. Among other things, Agenda 2000 embodies the development of a second pillar to the CAP covering structural, agri-environmental and rural policy.

The Agenda 2000 Reform of the CAP further moved away from price support and established a clear link between direct support to producers and environmental protection requirements. CAP does not provide any more for input subsidies. Member States are required to appropriate environmental measures in view of the situation of the land used or production concerned and which reflect environmental effects. There are a number of options to achieve this including through agri-environment, general mandatory requirements and specific environmental requirements constituting a condition for direct payments. Thus Member States are now in a position to ensure that direct support payments to producers do not lead to environmental problems. In the future it will be possible to examine the extent of Member States commitment.

The Commission stated in its Communication Elements for a Strategy for the Integration of Environmental Protection Requirements into the Common Fisheries Policy(2) that it is possible now to distinguish some types of subsidies clearly incompatible with a sustainable exploitation from those contributing to positive conservation effects. In the short term, theperversesubsidies should be removed and converted progressively into funds to finance positive actions. Moreover, in its Green Paper on the future of the Common Fisheries Policy(3), the Commission has stated that it may be necessary for the Community to consider whether and under what conditions investment aid for the fishing fleet might be phased out, in order to eliminate its counter-productive effects on fishing capacity, and Community aid redirected to focus exclusively on the further reduction of the fleet .

The Commission has actively participated in studies carried out by international organisations on the size and effects of subsidies to fisheries on the environment and the sustainable use of fishery resources. One good illustration in this regard is the Organisation for Economic Cooperation and Development (OECD) Committee for Fisheries' study on Transition to Responsible: Economic and Policy Implications(4).

(1) COM(2001) 264 final.

(2) COM(2001) 143 final.

(3) COM(2001) 135 final.

(4) ISBN: 9264171606.