Opinion of the Committee of the Regions on the 'Proposal for a Council Regulation (EC) on the common organisation of the markets in fishery and aquaculture products'
Date: 1999-09-16
Institutions: European Committee of the Regions
Subjects: aquaculture, common organisation of markets, fishery product

23.12.1999

EN

Official Journal of the European Communities

C 374/71

Opinion of the Committee of the Regions on the ‘Proposal for a Council Regulation (EC) on the
common organisation of the markets in fishery and aquaculture products’

(1999/C 374/16)

THE COMMITTEE OF THE REGIONS,

having regard to the Communication from the Commission to the Council and the European Parliament
on the future for the market in fisheries products in the European Union: responsibility, partnership,
competitiveness (COM(1997) 719 final);

having regard to the Proposal for a Regulation (EC) from the Council on the common organisation of the
market in fishery and aquaculture products (COM(1999) 55 final — 99/0047 CNS) (1);

having regard to the 1992 United Nations Conference on Environment and Development in Rio de
Janeiro. In particular Chapter 17 of Agenda 21 which addressed the issue of sustainable use and
conservation of marine living resources of the High Seas;

having regard to the Commission Decision dated 4 March 1999 to consult the Committee of the Regions
on this issue, in accordance with Article 198 C (first paragraph) of the Treaty establishing the European
Community;

having regard to the Bureau decision dated 7 May 1999 instructing Commission 2 — ‘Agriculture, Rural
Development and Fisheries’ — to draft the opinion;

having regard to the draft opinion (CdR 182/99 rev. 1) adopted by Commission 2 on 16 June 1999
[rapporteurs: Sir Simon Day (UK, EPP) and Mr Nordwall (SV, PES)],

adopted this opinion at its 30th plenary session on 15 and 16 September 1999 (meeting of 16 September).

1.

Introduction

2. The proposed regulation

The Commission’s communication (2) set out some
1.1.
guidelines as to how the markets in fishery products could be
improved. Extensive consultation followed within the industry
at large and the Commission has now published its formal
proposals at the behest of the Council of Ministers.

1.2.
Some of the aspects included within that debate have
been covered in proposals already published, and on which
the Committee of the Regions has already commented. Future
proposals are anticipated relating to market transparency.

1.3.
The current proposal on the common organisation of
the market in fishery and aquaculture products is intended to
replace that which has existed since 17 December 1992
[Regulation (EEC) No 3759/92 (3)] as well as consolidating into
a single regulation the provisions of Council Regulation (EEC)
No 105/76 (4), on the recognition of producer organisations in
the fishing industry, and No 1772/82 (5), laying down general
rules pertaining to producer organisations.

(1) OJ C 78, 20.3.1999, page 1.
(2) COM(1997) 719 final, 16.12.1997.
(3) OJ L 388, 31.12.1992, p. 1-36.
(4) OJ L 20, 28.1.1976, p. 39-41.
(5) OJ L 197, 6.7.1982, p. 1-2.

2.1.
The regulation proposes a thorough overhaul of the
organisation of the markets in fishery and aquaculture prod-
ucts, in particular:

— to enable the common organisation of the markets in these
products to contribute to the responsible management of
resources,

— to improve transparency and knowledge of the these

markets, including amongst consumers,

— to give greater responsibility, in particular to producer
organisations, to achieve optimal management of resources
and returns,

— to encourage partnerships between different operators to

maximise efficiency,

— to encourage greater use of

forecasting by producer

organisations, to adjust supply and demand,

— to improve market stability by encouraging fixed price

contracts,

— to revise the intervention arrangements

to improve

efficiency,

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— to raise competitiveness,

— to clarify and simplify existing regulations.

2.2.
Articles 1-3 make no change to what is currently in
force, although the definition of
fishery products needs
it would appear that aquaculture
clarification. As drafted,
products are solely farmed and not taken from the sea. There
is no distinction made between exclusively wild-caught species,
such as crab, urchins, etc., and exclusively farmed species such
as oysters. There are also species that can be either caught or
farmed, e.g. scallops and mussels. The list of fishery products
set out in the Table under Article 1 refers to various ways in
which crustaceans and molluscs can be processed but omits
‘depuration’, a technique used throughout the EU. At all events,
essentially sedentary species such as non-marine-fauna bivalve
molluscs (clams, razor shells, cockles), gasteropod molluscs
(ormer), bivalve molluscs Pectinidae (scallops) and crustaceans
such as barnacles, which are taken from natural beds, should
be considered in the same way as the same products when
they are farmed.

2.3.
Article 4 brings in a new provision which in respect of
retail sales will necessitate effective labelling. This will need to
show the local market name of the species, the production
method (taken at sea or farmed) and the geographic area, by
reference to ocean or sea, of the catch. We would welcome
this as a minimum requirement but wewould still hope to see
greater local branding of fish and aquaculture products. To
facilitate marketing of
including by tele-
auctioning, it is important that there are quality criteria. These
are laid down currently in Regulation (EEC) No 103/76 (1) and
are enforced by Member States.

fish products,

2.4.
Articles 5-12 cover regulations for producer organis-
ations. The latter are in effect suppliers’ co-operatives, set up
to assist the offshore fisheries industry in ensuring a regular
supply of fish to the market, but where appropriate within
quota limits, and may exercise an intervention policy to
provide a more stable price for fish.

2.5.
Article 5 therefore sets out the rules for the operation
of producer organisations and the obligations of their mem-
bers. A new provision is proposed in Article 5 para-
graph 1(b)(4) which, although not directly within the remit of
marketing organisations, encourages producers to consider the
delicate nature of the marine environment and promotes
fishing methods which complement moves toward sustain-
ability.

2.7.
Article 7 affords discretion to Member States to
recognise, in addition to those set up under Article 6, producer
organisations that agree and undertake to improve the quality
and marketing of certain fishery products in accordance with
the Regulation (EC) No 2406/96 (2). In this respect, attention
needs to be made to further development of vertical inte-
gration, especially between family businesses or groups of
businesses and the retail chains and supermarkets. As reflected
in earlier opinions, we believe that assistance to the fisheries
industry should be undertaken in a less discriminatory manner
and that assistance is not geographically limited according to
the whim of the Member State.

Article 8 allows Member States,

2.8.
in certain circum-
stances, to ensure that non-members of producer organis-
ations, in broad terms, do not undermine the price stability
objectives of producer organisations and Article 9 provides for
financial compensation in certain circumstances. Whereas,
though, Article 8 reproduces Article 5 in Regulation (EEC)
No 3759/92,
the
provisions relating to non-members only apply for a maximum
period of 12 months. It is not clear whether this is for the
purpose of regular review but, as drafted, it could be construed
that this will be an absolute limit.

there is one significant change in that

2.9.
Article 10 requires all producer organisations in
advance of each fishing year to submit operational pro-
grammes showing their marketing plans and how they intend
to manage the output of their members. Grant aid to a
producer organisation will be withdrawn if these plans are not
submitted or where it has failed to implement planned
measures. If a producer organisation is penalised twice, the
third offence will lead to withdrawal of recognition.

2.10.
As drafted, Article 10 is unworkable. Whereas it is
reasonable for a marketing plan to be prepared in advance of
the first year, it is not possible to finalise a catch plan until the
final quota is determined. In practice this can be as much as
six months into the fishing year in question. The fact that not
all species are necessarily subject to quota does not invalidate
the need to defer the catch plan, as the amount of quota will
influence the extent to which non-quota fish are caught.

2.11.
However, recognising the additional burden that
Article 10 imposes on producer organisations, Member States
are obliged, under Article 11, to provide additional grant aid
for a period of five years following the year in which they are
granted recognition. This is welcomed.

2.6.
The recognition of producer organisations is under-
taken by Member States and Article 6 sets out the procedure
for this and also the withdrawal of recognition. Provision is
made in Article 38 for reference to, and resolution by, a
Management Committee for Fishery Products, representative
of all the Member States, in the event of dispute.

2.12.
Article 12 provides additional grant aid to producer
organisations which can prove that at least 10 % of their
production will be sold through pre-sale contracts. The
purpose of this provision is to recognise that such contracts
help to plan supply. Grant aid is proposed for five years
starting on 1 January 2001, the date from which it is proposed

(1) OJ L 20, 28.1.1976, p. 29-34.

(2) OJ L 334, 23.12.1996, p. 1-15.

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that the new regulation comes into force. However, during
1998, proposals were published by the European Commission
to amend Regulation (EEC) No 2847/93 (1) on control regu-
lation. These include a provision under which a Member State
may require that the first marketing be by sale at an auction
centre. If adopted, such a provision would be in conflict with
the proposed Article 12 or, at
the very least, could be
discriminatory.

2.13.
Articles 13-16 cover interbranch organisations and
agreements. Whereas producer organisations cover the off-
shore fishing industry, recognition is also available to organis-
ations or associations which represent a significant share in
the production, trade or processing of fishery products, subject
to certain conditions and types of activity undertaken. Thus,
for example, the study and development of techniques to
optimise the operation of the market, including information
and communication technology, the regional branding of fish
products and organising training schemes to improve product
quality, would all be appropriate activities. Nothing must be
done, however, which hinders competition. Non-compliance
with the conditions will lead to withdrawal of recognition.
There are similar provisions for non-members as for those
relating to producer organisations. Unlike producer organis-
there is no grant aid provided specifically for
ations,
interbranch organisations but it is our view that, to improve
market efficiency,
there should be initial grant aid over
a three-year period to facilitate their establishment. The
discretionary element relating to recognition should not be
made mandatory provided, of course, that the pre-conditions
are met.

2.14.
Articles 17-24 govern the principles of intervention.
The first relates to pricing policy. Article 17 gives producer
organisations the right to set a withdrawal price, in effect a
reserve price, below which they will not sell. Removal of
products withdrawn from the market in this way must be
undertaken in a way which does not interfere with the normal
marketing of the product concerned. In order that producers
are compensated for the unsold catch, producer organisations
are empowered to fund this from an intervention fund. The
latter is replenished in part by way of a levy on successful
sales. Details of the list of products applicable, the duration in
which withdrawal prices are applicable and the level of
withdrawal prices proposed and applied have to be notified to
the Member State concerned.

2.15.
Under Article 18, the Management Committee for
Fishery Products will set a guide price, applicable throughout
the EU, in advance of the fishing year, or part of a year, in
question, in respect of each fish product. The guide price will
take into account the average prices received in the previous
three years, current trends in supply and demand, the need to
stabilise prices, avoid unnecessary surpluses and to balance the
interests of producers and consumers.

(1) OJ L 261, 20.10.1993, p. 1-16.

2.16.
Article 20 defines the Community withdrawal price
as between 70 % and 90 % of the guide price, subject to certain
adjustments, but that in no circumstances will the withdrawal
price exceed 90 %.

2.17.
Article 21 provides financial compensation to pro-
ducer organisations implementing a price intervention policy.
Producer organisations must use the Community withdrawal
price as its norm, but are allowed to vary this by up to 10 %
either way to reflect, in particular, seasonal fluctuations in
market prices. Such financial compensation will be paid only
where products are withdrawn from the market and either
disposed for other than human consumption or do not
otherwise interfere with normal marketing.

The amount of

2.18.
financial compensation and the
quantities eligible will be gradually reduced during the 2001,
2002 and 2003 fishing years but producer organisations will
be expected to offset that through their own intervention
funds. However,
the financial compensation proposed in
Article 21, paragraph 3(a), is significantly less then the current
regime and, whilst recognising the need to reduce the reliance
on intervention, the scale of reductions proposed are unreason-
able.

2.19.
Under Article 23, where products are withdrawn
from sale due to their inability to meet the withdrawal price
and, in respect of certain products, a buyer has not been found
at the Community withdrawal price (subject to the 10 %
tolerance factor) and the product is then stored or preserved,
‘carry-over aid’ may be payable. There are limits to what can
be claimed and in any event the grant aid will not exceed the
costs of preservation or storage. Of the permitted processing
methods, marinating is now included. The discretionary
element in this Article should be made mandatory, as provided
in the original Regulation (EEC) No 3759/92.

2.20.
The effect of this provision is to encourage producer
organisations to use this facility as a temporary withdrawal
from the market rather than a permanent withdrawal and the
revised grant aid system is designed to provide an incentive for
this to happen. In the context of fishery resources, this is a
sensible direction to take.

2.21.
For those producer organisations that set their own
withdrawal prices under Article 17, a flat rate grant is payable.
We are pleased to see that this is mandatory. However,
Article 24, paragraph 5, appears to be contradictory. In any
event, the quantities eligible for flat rate aid should remain
unchanged from that specified in the original Regulation (EEC)
No 3759/92.

2.22.
Article 25 provides for private storage aid for prod-
ucts that are frozen on board vessels. The rules for this are
similar to carry-over aid set out in Article 23 but, for the same
reasons as set out in paragraph above, the discretionary
element should be removed.

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2.23.
Articles 26-27 are concerned with compensation
payments in respect of tuna fish for canning. The European
there are no significant
Commission believes that whilst
changes as to the principles of these compensation payments,
the threshold for payments is too high and, as a consequence,
likely to result in payments being made when the grounds for
them could be insufficient. The proposal is that the threshold
is reduced from 91 % to 85 % of the Community producer
price. The COR disagrees with the Commission proposal, and
thinks that the threshold should remain at 91 %.

Articles 28-30 concern trade with third countries. In
2.24.
order to ensure more competitive and stable supplies to the
processing industry, particularly of species which the EU is
unable to provide or only in small amounts, it is proposed to
suspend import duties on these products, but only if the
imported value is equal to, or higher than, the intervention
price adopted within the EU.

However, the COR thinks that consideration should be given
to the position of certain ‘sensitive products’ such as loin fillets
of tuna, so that they continue to be covered by the present
quota system with CCT duties remaining at 24 %.

2.25.
There are some general provisions included within
Articles 31-43. The most significant is the continued provision
of a Management Committee for Fishery Products as provided
under Article 37 and its jurisdiction on disputes, and the
ability to make new measures, under Article 38.

2.26.
that:

The financial table incorporated in the annex reveals

— annual expenditure on community withdrawal and carry-
over grant aid will fall from 12m euros in 2000 to 7m
euros from 2003;

— annual expenditure on independent withdrawals and carry
over grant aid will remain unchanged at 3,5m euros;

— annual expenditure on private storage aid will be increased
from 0,5m euros in 2000 to 2m euros in 2002 onwards;

— annual expenditure on compensatory allowance for tuna
will be reduced from 4m to 2,5m euros from 2001
onwards;

— annual expenditure on the new allowances to producer
organisations will average 5,25m euros in the first three
years and 3m euros in the last 2 years. After 2005, only
newly created organisations will be eligible for assistance
and the expenditure is expected to be 0,5m euros per
annum;

— expenditure on the new allowances to producer organis-
ations for recourse to contracts is estimated at 1,7m euros
in 2001, 2,7m euros in 2002 and 4,7m until 2005;

— the additional allowance in respect of the reform of the
market organisation is expected to cost 3m euros in 2001,
rising to 5m euros in 2003 and 2,7m euros in 2004 and
2005. The schedule shows a credit of 4,5m euros in 2006
which is not explained. If this figure is reduced to zero
then this column in the table adds up correctly.

Taking these figures as stated, noting that

2.27.
they
represent estimated maximum figures, the assistance provided
to support the common market organisation for fisheries
products rises from 20m euros in 2000 to 25m euros in 2003,
falls to 22,7m euros in 2004/2005 and falls further to 15,5m
euros in 2006, assuming that there is not a 4,5m euros credit
(see previous paragraph).

3. Conclusions

The proposal largely consolidates existing regulations,
3.1.
but the main emphasis is on increasing efficiency and there is
a welcome recognition of the role of producer organisations
in achieving that. However, it is vital that the regulation reflects
practicalities, especially in relation to the timescale for the
production of marketing and catch plans.

3.2.
There is a need to ensure consistency of approach by
all Member States and therefore elements of discretion should
be removed.

3.3.
One of the efficiency gains that could be achieved is
through encouraging greater co-operation and communication
between the managers of fish auctions and fish catchers in the
various regions of the EU and the use of electronic auctions.
Financial assistance to facilitate the greater use of electronic
auctions would help develop this initiative.

3.4.
The proposals to improve labelling to give details of
origin are welcomed. These could go further to extend
into regional branding and marketing but, as a minimum
requirement, are acceptable.

3.5.
The effect of reducing intervention aid is to put EU
producers at a potential disadvantage relative to third
countries. Care must be taken to ensure that this does not lead
to an increase in imports of fish products from third countries
at the expense of the EU fisheries industry.

4. Recommendations

We recommend the following amendments to the draft
regulation:

(i)

In Article 4, paragraph 2, after ‘indicate’
insert ‘as a
minimum and on the basis that it does not prejudice local
branding of fish and aquaculture products, especially
where this improves customer awareness and confidence’.

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(ii)

In Article 5, paragraph 1(b)(4) amend:
‘encourage the
adoption of those methods of fishing which do most to
maintain equilibrium and sustainability of the resource’.

(iii)

In Article 7, paragraph 1, delete ‘may’ and insert ‘shall’.

(iv)

(v)

(vi)

In Article 8, delete ‘period not longer than 12 months’
and insert ‘periods not longer than 12 months without
annual review’.

In Article 10, paragraph 1, delete ‘Before the beginning
of the fishing year’ and in paragraph 1(b) after ‘members’
insert ‘the plan to be submitted within two months of the
date on which the producer organisation concerned is
formally notified of the final quota for all species for the
fishing year in question’.

In Article 12, paragraph 1,
‘Notwithstanding any provision to the contrary’.

insert at

the beginning

(vii) In Article 13, paragraph 1, after ‘Member States’ delete

‘may’ and insert ‘shall’.

(viii) In Article 13, insert a new numbered paragraph 8 as
follows ‘Member States shall grant aid the establishment
of interbranch organisations over a 3 year period in
accordance with the provisions of Article 11’.

Brussels, 16 September 1999.

(ix)

(x)

(xi)

In Article 21, paragraph 3(a)(i), for ‘2 %’ substitute ‘5 %’;
in paragraph 3(a)(ii) for ‘5 %’ substitute ‘8 %’; in paragraph
3(a)(iii) for ‘8 %’ substitute ‘10 %’ and in paragraph 3(b)
for ‘8 %’ substitute ‘10 %’.

In Article 23, paragraph 3, both in the first paragraph
and the second paragraph, delete ‘may’ and insert ‘shall’.

In Article 24, paragraph 5, delete the first sentence in its
entirety and in the second sentence delete ‘referred to in
the previous subparagraph’ and insert ‘of the products
concerned and put up for sale in accordance with Article
5(1)’.

(xii) In Article 25, paragraph 2, delete ‘may’ and insert ‘shall’.

(xiii) The triggering threshold for compensation payments for

tuna for canning should remain at 91 %.

(xiv) Provision should be made for financial assistance to
encourage greater co-operation and communication
between managers of fish auctions and fish catchers in
the various regions of the EU and in particular towards
the use of electronic auctions.

(xv)

In Annexes I and II, the lists of fresh and frozen products
eligible for Community private storage aid should include
swordfish.

(xvi) The inclusion in Annex V of certain sensitive products

such as loin fillets of tuna should be reviewed.

The President

of the Committee of the Regions

Manfred DAMMEYER