Opinion of the Economic and Social Committee on the "Report from the Commission to the Council on the state of implementation of Regulation (EC) No 2200/96 on the common organisation of the market in fruit and vegetables"
Date: 2001-05-30
Institutions: European Economic and Social Committee
Subjects: common organisation of markets, fruit, market intervention, marketing standard, producer organisation, vegetable

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Official Journal of the European Communities

7.8.2001

Opinion of the Economic and Social Committee on the ‘Report from the Commission to the
Council on the state of implementation of Regulation (EC) No 2200/96 on the common
organisation of the market in fruit and vegetables’

(2001/C 221/13)

On 27 February 2001 the Economic and Social Committee decided to issue an additional opinion, under
Rule 23(2) of its Rules of Procedure, on the above-mentioned report.

The Section for Agriculture, Rural Development and the Environment, which was responsible for
preparing the Committee’s work on this subject, adopted its opinion on 10 May 2001. The rapporteur
was Mr de las Heras Caban˜ as.

At its 382nd plenary session (meeting of 30 May 2001), the Economic and Social Committee adopted
the following opinion by 107 votes to one, with four abstentions.

1.

Introduction

1.1.
In 1996 the common market organisation for fruit
and vegetables underwent extensive reform. When the Council
approved the above Regulation, it stipulated that the new
system would be assessed after a period of four years. In
January 2001 the Commission therefore presented a report on
the implementation of this Regulation to the Council.

Two months before this report was presented, the
1.2.
Council adopted as a matter of urgency a proposal by the
European Commission to make a number of changes to the
common market organisation for fruit and vegetables, the aid
scheme for processed fruit and vegetables and the aid scheme
for producers of certain citrus fruits. The Committee has
already expressed its views on this proposal in its opinion (1)
of 19 October 2000.

1.3.
In its opinion, the Committee requested that this report
be accompanied by additional proposals or at least guidelines
concerning a number of essential points it had failed to address
and suggested that the following points, among others, be
looked into:

— need to improve knowledge of production and markets;

— improvement of quality standards for fruit and vegetables,

and monitoring;

— obstacles to the development of producer organisations
and to improvements in their effectiveness. Need to
encourage producer organisations to merge and form
associations;

— operation of producer organisations’ operational funds
and programmes, and dovetailing of these with rural
to
development measures. Assessment of
which the aims of improving quality, respect for the
environment and food safety have been achieved;

the extent

(1) OJ C 14, 16.1.2001 (amendment of Regulations 2200, 2201 and

2202)

— possibility of harmonising the criteria for environmental

measures under the operational programmes;

— operation of the intervention system and assessment of
the need to reinstate the concept of ‘serious crisis’;

— trade and respect for Community preference;

— specific measures needed for products facing stiff inter-
national competition. Long-term solution of the problem
of shell fruits and carob beans and support for certain
processed fruit and vegetables.

1.4.
Because some of these suggestions are only described
in the report, no conclusions can be drawn concerning what
future guidelines should be examined. The report also fails to
address a considerable number of issues raised by the Com-
mittee in its October opinion. The Committee has therefore
taken the initiative of drawing up this additional opinion in
order to take a more in-depth look at necessary future
guidelines, as discussed below.

2. General comments

The Committee acknowledges

the Commission’s
2.1.
efforts to offer as comprehensive an overview as possible of
the way in which the common market organisation in fruit
and vegetables works. It also welcomes the fact that the
report contains a number of proposals and raises questions
concerning future guidelines for marketing standards and
the development of producer organisations and interbranch
organisations. The Committee also realises that it is difficult to
assess some aspects of the report when it does not have
sufficient data.

2.2.
However, the report fails to address many real issues
in the sector and is therefore unlikely to meet its objective of
guiding discussions and proposals aimed at improving the
common market organisation. Its analysis of crucial areas is

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insufficient and it does not take a sufficiently in-depth look at
factors that have prevented a bigger increase in the concen-
tration of supply, better use of operational funds and greater
efficiency in using budget resources.

2.3.
A number of essential aspects for the fruit and
vegetable sector should be included in the report, such as, the
opening-up of markets to imports from third countries
following the GATT agreements, the weakening of Community
preference in recent years and plant health-related barriers to
EU exports. The report should also have looked ahead to
the potential
impact of a further liberalisation of trade in
agricultural products agreed at the WTO, concessions made
under trade agreements between the EU and third countries,
the establishment of free trade areas and EU enlargement.

2.4.
The report also needs to analyse problems with border
protection mechanisms, such as insufficient Community tariffs
for certain products, restrictions on the proper implementation
of entry prices, the inefficiency of the special safeguard clause
and the application of import certificates.

Likewise, account must be taken of the complexity of
2.5.
fruit and vegetable policy at international level due to the
problems it raises for third countries with regard to sustainable
development, food safety and respect for fundamental rights.
Guarantees are therefore needed that fruit and vegetables
imported into the EU have been produced under proper
conditions so as to ensure that due respect is paid to human
dignity, the social rights of producers and workers, and the
environment in producer countries.

2.6.
The Committee notes that the report fails to analyse
the situation of processed fruit and vegetables despite the
growing importance of this sector (which accounts for more
than a third of production) and despite the vital role played by
the processing industry in keeping people, jobs and economic
activity in producer regions. Given that certain processed fruits
and vegetables, such as tinned asparagus, apricots and cherries,
are in a critical situation in the face of international compe-
tition, the Committee recommends that the effectiveness of
current support measures for processed products be examined
in greater detail and, if relevant, that these products be included
under the rules of the common market organisation for the
fruit and vegetable sector.

2.8.
The Committee would like to point out that the fruit
and vegetable sector is currently in a delicate situation due to
labour shortages and social problems caused by the surge in
immigration in producer regions. Measures therefore need to
be taken to regularise and improve the situation of immigrants
working in the sector. There is an urgent need for public
authorities to draw up policies for the social integration and
employment of such workers and consideration should also
be given to administrative and tax measures to encourage
seasonal work.

2.9.
The Committee notes that the fruit and vegetables
sector still has to contend with a structurally unbalanced
market. In addition it is a fact that the consumption of fruit
and vegetables in some Member States is far less than it should
be from the point of view of public health. The Committee
therefore believes that greater budgetary support is needed for
organising information and promotion campaigns for fruit
and vegetables in both the horizontal regulations and the
common market organisation. Existing restrictions should
therefore be eliminated and growers’ organisations encouraged
to use the money available in the CMO budget for promotion
and information.

3.

Specific comments

3.1. Marketing standards

The Committee reiterates its call for improvements
3.1.1.
fruit and vegetables sold.
in the quality and variety of
Consumers now demand more information about
their
organoleptic qualities, nutritional value, origin and production
methods used etc. so they can make a more informed choice,
and greater guarantees regarding food safety and respect for
the environment. Recognition also needs to be given to
producers’ efforts to adjust to market needs and to their
contribution towards protecting the rural environment.

3.1.2.
The Committee welcomes the existence of quality
criteria in the distribution sector that are adapted to regulations
currently in force, but is concerned by the proliferation of fruit
and vegetable quality labelling systems which incorporate
environmental values, as these can lead to confusion among
consumers. It also raises a number of questions concerning
the criteria imposed on producers by the distribution sector,
especially as it is unclear whether they are the same for all
producers.

2.7.
The Committee also draws the Commission’s attention
to the need to develop a Community policy to encourage
setting up schemes to insure fruits and vegetables against
natural catastrophes, while respecting the systems which
already exist in some Member States.

Quality standards

should be maintained and
3.1.3.
developed as they are a necessary tool for market transparency
and better trade relations, and provide the consumer with

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useful information when choosing products. The Committee
is also in favour of maintaining the possibility of using
standards to manage serious market crises.

3.2. Producer organisations (POs)

3.2.1.
Producer organisations are still the cornerstone of
the common market organisation for fruit and vegetables and
yet the report notes that the 1996 reform has not met its
objectives of organising and grouping supply, and improving
the efficiency of POs in response to increasingly concentrated
distribution. An analysis is therefore needed of existing
obstacles in producer regions and possible incentives through
specific programmes to encourage small farmers to join POs
voluntarily, thus increasing their size. Incentives are needed to
encourage the setting-up of and cooperation between POs,
and to encourage POs to merge and form associations.

3.2.2.
Other aspects that should be analysed to provide
incentives for forming and joining associations include the
suitability of recognition criteria and the involvement of
producers in running and monitoring POs.

3.3.

Interbranch organisations and agreements

that operational

funds and the fact

to operational
fund
implementation procedures have been simplified, no mention
is made of this in the report. However, the Committee thinks
that greater consideration needs to be given to making
procedures for contributing to operational funds more flexible
and to simplifying procedures for presenting and managing
operational and monitoring programmes in order to qualify
for operational fund support. A clearer definition is also
needed of the nature and functioning of POs as recipients of
such aid, as mentioned in point 3.2.2.

3.5.2.
The Committee is also concerned that the Com-
mission does not possess more detailed information on the
nature of
the actions carried out under the operational
programmes as this could offer guidelines for improving the
efficiency with which funds earmarked for such programmes
are used.

Consideration should be given to increasing public
3.5.3.
participation in the aforementioned funds according to a
number of specific criteria, such as, the economic dimension of
associated producers, the need for greater regional organisation
and the low profitability of certain products due to structural
crises. Consideration could also be given to actions undertaken
in connection with cooperation between POs and mergers
between POs and their associations. This should all help to
improve the organisation of supply.

3.3.1.
The Committee agrees with the Commission that
existing restrictions could be reduced to allow interbranch
agreements to be implemented with greater efficiency and
free
ease, providing they do not alter the conditions of
competition in the market.

3.6. Eco-conditionality

3.4.

Intervention arrangements

3.4.1.
Changes to intervention arrangements have led to a
significant fall in the number of products being withdrawn
from the market. However, it has also become clear that such
withdrawal mechanisms are unsuited to deal with certain
crises. The Committee therefore proposes a study into the
viability of reinstating the concept of ‘serious crisis’ to regulate
the market in the event of short-term surpluses of certain
products, primarily summer fruits.

A lack of awareness of the realities of production
3.4.2.
leads to structural surpluses. Additional measures are needed
to alleviate this problem and help scale and restructure
production so it can adapt to the reality of the market.

3.6.1.
The 1996 reform of the common market organis-
ation for fruit and vegetables sought to include environmental
the
protection in actions undertaken by POs. However,
Committee points out that the report only briefly touches on
this and recommends an in-depth study into the use of scarce
natural resources, in particular non-renewable energy and the
use of water in arid regions, and in general the environmental
impact of fruit and vegetable production on nature.

3.6.2.
The Committee stresses the need to move as quickly
as possible towards more ecological production methods for
fruit and vegetables providing that due consideration is given
to their economic impact on both producers and consumers.
The Committee realises that this will only be possible if
products imported from third countries are subject to the same
requirements.

3.5. Operational funds and their utilisation

3.7. The case of nuts

3.5.1.
Despite a number of recent reforms to offer POs
greater security with regard to the level of support granted

The Commission report highlights the poor competi-
3.7.1.
tiveness of the nut and carob bean sector due to imports from
third countries and this sector’s importance in containing

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depopulation and desertification in vast rural areas of the
Mediterranean. However, the socio-economic dimension, the
lack of alternatives and the jobs created by this sector locally
should have been studied in greater depth.

3.7.2. Most of the ten-year plans for improving the quality
and marketing of nuts and carob beans expire in 2001. This
puts nut producers in an unsustainable position and leads to
crops being abandoned as common market organisation or
rural development measures are either insufficient or unsuited
to this sector’s particular situation. Analyses of what sustaining
the sector has cost and is costing the EU should look beyond
mere economics, given the strategic role played by the
European sector in international trade in these products.

3.7.3.
Given the current crisis in this sector, the Committee
therefore regrets that the report does not offer the option of
implementing stable agricultural policy measures to help the
sector survive and reiterates the need to offer income support,
as already mooted in previous ESC opinions (1).

3.8. Citrus processing aid

3.8.1.
The Committee agrees with the Commission that the
new system has proved its validity in most citrus-growing
regions, and that processed quantities have remained stable
and the industrial fabric has been maintained. However, it
considers that the results of its implementation have not been
as satisfactory due to the fact that thresholds are not in tune
with market trends, and the adverse impact of aid penalties on
producer incomes and the complexity and bureaucracy of
procedures for implementing the system.

The Commission’s analysis of the implementation of
3.8.2.
mechanisms for citrus-fruit processing fails to explain the
reasons behind the recently approved reform, such as the
increasing production of and demand for juice and the fact
that higher aid penalties encouraged citrus fruits to be
withdrawn. This makes the report less coherent.

(1) OJ C 14, 16.1.2001 — OJ C 116, 20.4.2001.

Brussels, 30 May 2001.

3.9. Coexistence of

the fruit and vegetable regime and rural

development measures

3.9.1.
Given the efforts needed by the sector to adapt swiftly
to market trends, common market organisation measures need
to continue to dovetail with rural development measures so
that POs can use both sources of funding effectively and
coherently. Checks to prevent one action receiving two sources
of funding must not restrict potential funding for structural
improvements.

3.10. Budgetary issues

3.10.1.
The Committee believes a more detailed and exten-
sive analysis is needed of all common market organisation
financing in order to properly assess spending and how well it
responds to the sector’s needs. The conclusions drawn can
then be used to draw up guidelines to ensure that available
resources are used more effectively.

3.11. National and Community checks

3.11.1.
The report refers to checks carried out by the
European Commission’s special corps of inspectors on the
implementation of marketing standards by Member States.
Given the contribution these standards make to transparency
in the market, the Committee believes the results of these
checks need to be made public.

4. Conclusions

The Committee acknowledges

4.1.
the Commission’s
efforts to describe the current situation of the sector and
considers the report acceptable as an information document.
However, it questions its usefulness as the basis for a coherent
discussion of the sector’s problems and for possible legislation
to improve the common market organisation for fruit and
vegetables. The Committee also believes that a more detailed
and extensive analysis should have been carried out of issues
in this sector and suggestions put forward for solving them.

4.2.
The Committee urges the European Parliament and the
Council to broaden their discussion beyond the content of the
report and calls on the Commission to present short-term
proposals to adapt the common market organisation, based
on the guidelines set out in this opinion.

The President

of the Economic and Social Committee

Göke FRERICHS