WRITTEN QUESTION E-1923/00

by Elspeth Attwooll (ELDR), Chris Davies (ELDR) and Jan Mulder (ELDR) to the Commission

(16 June 2000)

Subject: Tobacco subsidies

It is stated that socio-economic factors are major obstacles to the removal of subsidies to tobacco farmers throughout the European Union. Tobacco farming is labour-intensive and is often undertaken in poor quality soil unfit for other crops.

Can the Commission outline what steps it has taken or intends to take to encourage tobacco farmers to move into other economic sectors, both agricultural and non-agricultural? What investigations have been undertaken to establish the viability of growing other crops in tobacco-growing areas? If tobacco subsidies were to be further reduced, could the same funds be used to finance structural measures in local economies reliant on tobacco farming?

Answer given by Mr Fischler on behalf of the Commission

(19 July 2000)

In the tobacco sector the support arrangements are based on quotas; unlike many other sectors which are regulated by guarantee thresholds, there is no support for production beyond the total quota.

In order to reduce production, when a producer voluntarily surrenders his quota, a quota buy-back programme exists which could reduce the quantity of tobacco produced (Council Regulation (EEC) No 2075/92 of 30 June 1992 on the common organization of the market in raw tobacco(1), Commission Regulation (EC) No 2848/98 of 22 December 1998 laying down detailed rules for the application of Council Regulation (EEC) No 2075/92 as regards the premium scheme, production quotas and the specific aid to be granted to producer groups in the raw tobacco sector(2)).

Within the framework of the Community structural policy for 2000-2006, the same regulation also introduced the possibility to implement rural development programmes to allow tobacco-growing regions in difficulty to convert to other activities. These programmes can benefit from Community financing provided under Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European agricultural guidance and guarantee fund (EAGGF) and amending and repealing certain Regulations(3).

The conversions to other cultivation offering the same opportunities in terms of employment are extremely limited since the labour intensity rate of tobacco cultivation is exceptionally high. There is some experience of converting to the ornamental horticulture sector in some Italian regions. However, major technical difficulties have so far limited the success of such initiatives.

Furthermore, the Community tobacco fund finances studies of the possibilities for producers of raw tobacco to switch to other crops or activities. The Commission is currently updating Regulation (EEC) No 2427/93 of 1 September 1993 laying down detailed rules for the application of Council Regulation (EEC) No 2075/92 with regard to the Community Fund for tobacco research and information(4) following the Council decision on the Commission's proposal to double the producer levy that underpins this fund.

The conversion of tobacco production towards other activities, whether agricultural or non-agricultural, is an option to which the Commission continues to pay particular attention. Nevertheless, the main tobacco-growing zones, notably in Italy and Greece, are concentrated in regions whose development is lagging behind. Thus, the location of the tobacco-growing areas, which have very few viable economic alternative solutions to tobacco production, also inhibits any significant move away from this sector.

The biggest obstacle to conversion is not resources, but finding alternatives that offer comparable socio-economic benefits. Finally, it should be added that the budgetary disciplines agreed between the institutions preclude the transfer of further funds from market support to structural programmes.

(1) OJ L 215, 30.7.1992.

(2) OJ L 358, 31.12.1998.

(3) OJ L 160, 26.6.1999.

(4) OJ L 223, 2.9.1993.