EN Official Journal of the European Union CE 78/564

(2004/C 78 E/0599)

WRITTEN QUESTION E-3490/03

by Ilda Figueiredo (GUE/NGL) to the Commission

(24 November 2003)

Subject: Regulating the market and olive growers' incomes under the reform of the COM in olive oil

The Commission Communication on ‘accomplishing a sustainable agricultural model for Europe through the reform of the CAP — the tobacco, olive oil, cotton and sugar sectors’ (1) states that ‘adhesion to the single farm payment’ — instead of the existing production-linked payments — ‘enables low input olive oil producing regions to maintain their overall level of income support’. Furthermore, the Commission proposes that ‘the refunds relating both to export and to manufacture of certain preserved food should be repealed’, and that other market policies ‘should be kept intact’.

The Commission:

1. How does it assess the impact of eliminating the previous reform's intervention price in the olive oil sector, given the pattern of prices paid to producers, and their impact on olive growers' incomes? Does it believe that the existing regulatory mechanisms, resting as they do on private storage subsidies, are enough to achieve the objective of regulating the market during and between marketing seasons?

2. What does it believe the impact of the current proposal will be on Portuguese olive growers' incomes?

3. What is its reason for abolishing export refunds in the olive oil sector, specifically with regard to the manufacture of certain preserved food, given that this subsidy has an effect on the promotion of the use of olive oil? Does it not believe that reintroducing the abolished consumption aids would provide a solution, not only in terms of promoting olive oil, but also of controlling its production?

Answer given by Mr Fischler on behalf of the Commission

(22 December 2003)

The intervention mechanism was abolished at the time of the 1998 reform. Since then, except for very limited periods, market prices have been higher than the former intervention price. Olive growers have therefore not suffered a loss of income, and it has been possible to avoid encouraging production based on quantity rather than quality and oriented towards sales to intervention agencies. Such production could have led to a general fall in the prices paid to growers and hence to a reduction in their income.

The principles of the latest reform involves regulating production according to market demand, as is already largely the case in the olive-oil sector. It therefore does not appear necessary to change the current situation, and the Commission proposes maintaining the private storage system simply as a safety net to be activated in the event of a crisis.

Since the olive-oil sector is already strongly oriented towards the market, the Commission does not expect significant reductions in production levels in Portugal after the reform comes into effect. The Commission proposal also includes maintaining the current level of support for the olive-oil sector in each producer Member State, while decoupling will enable the grower support level to stabilise regardless of annual harvest fluctuations.

The Commission considers that equilibrium will be achieved if the whole olive-oil sector is committed to continuous quality improvement, thereby stimulating sustained growth in demand.

Since export refunds ceased in 1998, sales of Community olive oil in third countries have increased by 50 %. This proves most clearly the instrument's lack of effectiveness as regards promoting growth in Community olive oil exports. It therefore seems appropriate to abolish a mechanism which no longer serves a useful purpose.

The Commission considers that refunds for the manufacture of certain olive-oil preserves are no longer necessary because olive oil's good image means that consumers are now prepared to pay more for foodstuffs containing it. Once again, market demand based on product quality will be determinant in developing outlets for olive-oil use.

By the same token, there is no apparent justification for reintroducing olive-oil consumption aid. It would not help to control production and would entail the management problems familiar from past experience.

(1) COM(2003)final.