WRITTEN QUESTION E-2515/99

by Mikko Pesälä (ELDR) to the Commission

(22 December 1999)

Subject: Taking processing projects into consideration in the proposal on flax

The Commission's proposal for a new EU regulation on flax fibres creates problems for Finland, because it proposes that the production of flax for fibres should be made subject to a quota based on quantities cultivated in the past. In Finland, the growing of flax for fibres has hitherto been a small-scale operation.

The growing of flax for fibres is only in its infancy in Finland, and this is why the amount cultivated in recent years has been small, at only a few thousand hectares per year. At present Finnish agriculture is undergoing a structural change, with farms being forced to diversify into new directions and find new profitable forms of crop. One promising alternative seems to be the production of fibre flax, a plant which suits Finnish conditions very well. We have had per-hectare yields of the same order as in the best growing areas in the EU, and the cultivation of flax for fibres is therefore expected to increase considerably in the future. The imposition of quotas is the worst thing that could happen to Finnish flax production at this juncture. At least three new flax processing plants are currently being built in Finland, which will require in total by way of raw material the yield of at least 12 000 to 12 500 hectares of flax. If the Commission's new flax regulation is implemented in its current form, it will deprive us of the opportunity to expand domestic cultivation and the new factories will thus have to operate with imported raw materials. These are not realistic conditions for developing the Finnish flax industry.

Furthermore, the requirement in the proposal that the product once made into fibre should contain not more than 5 % of shives is too strict for the Finnish insulating wool

production industry. The Commission proposal on subsidies also places Finland at a disadvantage in view of the low reference harvests it sets for fibre flax crops, since the subsidies would be partly calculated on this basis. Different levels of aid are proposed for the processing of long and short fibres, even though the definition of the differences between the different types of fibre is not clear and their use in practice is largely the same.

What action will the Commission take to ensure that long- and short- fibre flax are not pointlessly separated from each other by these new definitions? What does the Commission propose to do to ensure that there are good conditions for the cultivation and processing of fibre flax in Finland as elsewhere? How does the Commission propose to protect the development of flax cultivation and processing and its prospects as a part of Finnish agriculture?

Answer given by Mr Fischler on behalf of the Commission

(20 January 2000)

The major increase in the areas sown with fibre flax and hemp in recent years has not been matched by a comparable expansion in output or in real market demand for these products. The support scheme has been destabilised by low-cost and very low-yield flax and hemp crops, developed with the sole purpose of generating entitlement to assistance.

A series of legal provisions have been adopted in recent years to step up controls and to try to prevent speculative crops. However, in view of the development of the areas cultivated, it is clear that these provisions have not had the desired effect. Their main consequence has been considerably to complicate the legislation.

The Commission's reform proposal(1) is intended to put the sector back on a healthy footing and to take account of the technical developments of recent years, in particular in relation to new uses. The proposed scheme is intended to ensure that economic activity is maintained in the traditional production of long-fibre flax for use in the textiles industry, but it also aims at helping other economically viable outlets to become established and find stable markets. Finnish flax producers will have an opportunity to develop the crop as long as their output matches a demand on the market. However, subsidy-driven production will be restricted.

The proposal thus aims at achieving balance on the market for new flax and hemp products, while continuing the effort to simplify management and tighten up budgeting already under way in a number of other sectors covered by the common agriculture policy (CAP). In the circumstances, budget stabilisers must be introduced to prevent any fraudulent increase in quantities eligible for assistance and to avoid the risk of Community expenditure running out of control. Bearing in mind the need for rigorous budgeting, the stabilisers must be calculated on the basis of figures corresponding as far as possible to real levels of output rather than on the basis of somewhat problematic forward estimates of expansion.

As to the differentiation between long-fibre and short-fibre flax, two products with quite distinct markets, the proposal provides for criteria to be laid down in the implementing arrangements to be introduced by the Commission at a later stage. Implementing rules are the most suitable instrument for transposing technical definitions into law, because they are more adaptable to any technical progress in the sector.

(1) COM(99) 576 final.