Opinion of the Economic and Social Committee on the "Proposal for a Council Regulation amending Regulation (EEC) No 2019/93 introducing specific measures for the smaller Aegean islands concerning certain agricultural products"
Date: 2002-01-16
Institutions: European Economic and Social Committee
Subjects: Aegean Islands, agricultural product, aid per hectare, aid system, supply, supply balance sheet

3.4.2002

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Official Journal of the European Communities

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2.5.
It is crucial that the institutional equilibrium between
potato starch and maize starch will be guaranteed in the
future.

3. Conclusion

The ESC endorses the present Commission proposal for a
Council regulation.

Brussels, 16 January 2002.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation
amending Regulation (EEC) No 2019/93 introducing specific measures for the smaller Aegean
islands concerning certain agricultural products’

(2002/C 80/12)

On 26 November 2001 the Council decided to consult the Economic and Social Committee, under
Articles 36 and 37 of the Treaty establishing the European Community, on the above-mentioned
proposal.

On 27 November 2001, the Bureau of the Economic and Social Committee asked the Section for
Agriculture, Rural Development and the Environment to prepare an opinion on the subject.

Owing to the urgent nature of the opinion, the 387th ESC plenary session of 16 and 17 January 2002
(meeting of 16 January) appointed Mr Papamichaïl as rapporteur-general and adopted his opinion by
68 votes for with three abstentions.

1.

Introduction — Background

1.1. When the European Council met in Rhodes on 2 and
3 December 1988, it recognised the difficulties certain of the
Community’s island regions have in making progress in their
economic and social development, owing to their isolation,
remoteness, small area, geographical relief, small-scale farming
activities, lack of economies of scale, dependence, high pro-
duction and transport costs and climatic conditions.

The Commission conducted a global study (1) of the
1.2.
specific problems of small Aegean islands (with a population
of under 100 000) and produced regulatory proposals for the
creation of a framework of agricultural measures to be financed

under the EAGGF — guarantee and guidance sections. These
proposals defined the overall strategy and practical measures
for tackling the problems.

On 12 February 1993, the Council asked the Economic
1.3.
and Social Committee for an opinion on the Commission’s
draft regulation. On 26 May 1993, the ESC assembly unani-
mously adopted the opinion, drafted by Mr Spyroudis (2).

1.3.1.
On 19 July 1993, having taken into account the
Commission’s proposal and the views of the European Parlia-
ment and the ESC, the Council published Regulation (EC)
No 2019/93 (3).

(1) COM(2001) 64 final of 7.2.2001.

(2) OJ C 201, 26.7.1993, p. 22.
(3) OJ L 184, 27.7.1993, pp. 1-7.

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In 1996,

1.3.1.1.
in accordance with Article 15(1) of
Regulation (EC) No 2019/93, the Commission submitted its
first progress report (1) to the Council and the European
Parliament on the implementation of the specific measures for
the smaller Aegean islands.

In 1998,

in accordance with Article 15(1) of
1.3.1.2.
Regulation (EC) No 2019/93, the Commission submitted a
second report on the implementation of the programme in
1995 to the Council and the European Parliament (2).

1.3.1.3.
In accordance with Article 15(1) of Regulation (EC)
No 2019/93, the Commission drafted an annual report on the
implementation of the programme in 1996 and 1997.

1.3.1.4.
The Commission also appointed external consult-
ants (Speed Ltd.) to draw up an evaluation report on the
economic situation in the smaller Aegean islands, which also
assesses the impact of the measures implemented under the
regulation.

1.3.1.5.
In accordance with Article 15(2) of Regulation (EC)
No 2019/93, the Commission submitted the above-mentioned
annual reports and the general evaluation report to the Council
in the form of document
and the European Parliament
COM(2001) 64 final.

1.4.
The Commission drafted the present proposed amend-
ment to Regulation (EC) No 2019/93 on the basis of the
above, in accordance with the revision clause in Article 15(2)
of the regulation.

2. Brief summary of Regulation (EC) No 2019/93

2.1.
Regulation (EC) No 2019/93 was intended to ease the
problems facing the island regions in the Aegean Sea (islands
with populations of under 100 000), with relation to specific
agricultural products and means of agricultural production.
Specific measures were taken to support supply arrangements
and local production, with a view to counter-balancing this
disadvantage. Provision for financing these measures was made
in special Community budget headings (EAGGF — guarantee
section appropriations of the order of EUR 25 million a year).
It also included a series of structural derogations. Additional
amounts were not entered in the budget for these derogations;
the cost of financing them was covered by appropriations
from the EAGGF — guidance section under the Community
Support Framework (CSF).

2.2.

Specific supply arrangements (SSA)

The SSAs are designed to offset the additional cost of the
supply of certain products, in order to make them available at
prices that are fair in comparison with the mainland. The
quantities eligible for the SSAs are determined on the basis of
forecast supply balances, which are periodically reviewed in
accordance with requirements. For the implementation of the
SSAs, the islands were classified in two groups, depending
on their distance from ports on the Greek mainland. The
Community contribution covers 90 % of the cost of the
measures and the remaining 10 % is covered by the Member
State.

2.3. Measures to support local products

These measures are designed to support traditional
local
agricultural activities, in arable and livestock farming, to help
them meet market demand and to revive certain production
sectors for which the Aegean islands traditionally have a
natural flair.

2.4.

Structural derogations

To improve the effectiveness of agricultural structures, a
derogation to Council Regulation 2328/91 (3) of 15 July 1991
set out conditions under which aid would be granted for
investment in agricultural activities in the smaller Aegean
islands. It also provides for the Community contribution to
exceed the specified level (50 %) in the case of investment in
certain areas of the processing and marketing of agricultural
products, with a view to improving the living conditions of
the inhabitants.

3. Main points of the proposed amendment

3.1.
The adjustments to the regulation suggested by the
Commission (in the light of the conclusions of the general
evaluation report), in this proposal for an amendment submit-
ted to the Council for adoption, remain within the framework
of the estimated appropriations stated in the financial perspec-
tives (approximately EUR 26 million).

The list of products covered by the specific supply

3.2.
arrangements (SSA) has been revised.

3.2.1.
ition on re-exporting.

Processed products will be excluded from the prohib-

(1) COM(96) 387 final.
(2) COM(98) 292 final.

(3) OJ L 218, 6.8.1991, pp. 1-21.

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3.2.2.
The revised regulation will no longer cover fruit and
vegetables, referred to in Article 3(2) of Regulation (EC)
No 2019/93. According to that article, this aid was to be
reduced progressively over five years from 1993 until 1997,
the final year of programme implementation. Moreover, the
measure turned out to be of little use, as the companies that
transport the small quantities consumed on the islands are
small and do not have the infrastructure necessary to benefit
from the aid.

Furthermore, the amendment does away with SSA
3.2.3.
measures for products which had limited results (sugar) or
zero effect (yoghurt).

corresponding reduction in the amount of aid provided for
under Article 4(4) of Regulation (EC) No 1254/1999 (1) for
overstepping the national ceiling.

3.2.6.2.
is set at 75 000.

The ceiling for the number of hives eligible for aid

3.2.6.3.
Responsibility for drafting annual reports on the
implementation of the measures provided for in the regulation
is transferred from the Commission to the Member State.

3.2.6.4.
supply balance in accordance with requirements.

The Commission will draw up and review the

3.2.4.
It is proposed to give the Commission responsibility
for reviewing the list and to simplify the management of the
supply balances.

3.2.7.
local cheeses and ageing of liqueur wines) will be abolished.

Aid that has not proved very effective (storage of

3.2.5.
Following the needs analysis, adjustments are pro-
posed for the measures relating to local agricultural products.

3.2.8.
Overly costly and complicated aid for fruit and
vegetables and flowers, which was moreover not used, will
also be abolished.

3.2.5.1. Making appropriate adjustments,
the proposal
maintains the systems applying to cattle farming, areas under
vines for the production of quality wines psr, olive groves, the
cultivation of potatoes for human consumption and seed
potatoes, as well as the production of honey of special quality.
The breakdown of the sum of financial aid is expressed in
euros rather than the ecus provided for in Regulation (EC)
No 2019/93:

— EUR 48,3 per head for bovine animals (as opposed to

ECU 40);

— EUR 603 per hectare for potatoes (as opposed to

ECU 500);

— EUR 476 per hectare for vines (as opposed to ECU 400);

— EUR 145 per hectare for olive groves (as opposed to

ECU 120);

3.2.9.
Although the structural derogations were abolished
by Community Regulation (EC) No 1257/1999 (2) on rural
development, recital 53 of that regulation provides for flexi-
bility, the possibility for adjustments and derogations.

3.2.9.1.
On the basis of the above-mentioned recital, it is
stated that the overall value of aid may be increased by a
maximum 15 percentage points for investments intended to
encourage diversification, restructuring, or a move towards
sustainable agriculture.

3.2.9.2.
Furthermore, the ceiling for investment in small
and medium-sized enterprises engaged in processing and
marketing local agricultural products has been raised to 65 %.

3.2.10.
It is stated that, at the end of every five-year period
of implementing the programme measures, the Commission
will submit a general report to the Council and the European
Parliament, in which it will suggest any appropriate adjust-
ments. This essentially means that revision is possible after five
years.

— EUR 12 per hive for honey (as opposed to ECU 10 and 7
for two types of producer as provided under Regulation
(EC) No 2019/93).

4. General comments

3.2.6.
ties eligible for aid:

The following is proposed with regard to the quanti-

It is clear that the Commission was guided in its
4.1.
proposed amendment to the Regulation by the conclusions of

3.2.6.1.
Fattening aid for male bovine animals is set at a
ceiling of 12 000 animals a year, without applying the

(1) OJ L 160, 26.6.1999, pp. 21-47.
(2) OJ L 160, 26.6.1999, pp. 80-102.

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the reports which it drafted during the first seven years of
programme implementation (1993-1999). In general, the ESC
views the amendments in a positive light.

— professional associations;

— municipal authorities:

4.2.
The ESC would draw attention to the contribution of
the development of the smaller Aegean islands to the general
development of the country. It is in favour of supporting the
agricultural sector, not in a isolated way, but as part of an
overall plan for the economic and social development of the
islands, in order to further the strategic goal of sustainability
(viability). A plan of this kind should include specific measures
for all sectors of production, such as:

— supporting and developing traditional industries;

— preserving and promoting local culture;

— encouraging investment initiatives;

— taking measures to address seasonal unemployment, such
as the development of rural tourism as an alternative to
mass tourism and to supplement agricultural income;

— taking decisive action to protect the environment;

— securing energy supplies by using alternative and environ-
mentally sound forms of energy (wind/solar power) and
managing water resources efficiently in order to deal with
perennial water shortage problems;

with a view to good management, effective checks and
balances and the successful implementation of the programme
established by the regulation.

The ESC wonders why the regulation is (geographically)
4.4.
restrictive, covering only the smaller Aegean islands and not
all small Greek islands (e.g. Gavdos), the problems of which
are at least similar if not identical.

4.5.
Given the border position of the Aegean islands, the
ESC would also note the need to support customs, port and
coastguard services, in order to deal with smuggling, illegal
fishing and illegal immigration, which has recently reached
massive proportions owing to the wars in Afghanistan and the
Middle East.

4.6.
Corresponding attention must be given to the issue of
peace and security in the region. The ESC believes that it
definitely does not serve the interests of the Community to
make a distinction between the Aegean and other regions of
the European Union when discussing a Euro army (Eurocorps).

— upgrading health and hospital services;

5. Specific comments

— improving the educational infrastructure;

— providing vocational training;

5.1. Article 2

— securing high quality communications and transport.

4.3.
The ESC would reiterate the points made in its earlier
opinion (1) on the need for the viable development of fishing
and the exploitation of maritime resources, such as sponge
fishing and fish farming.

The Committee would also point out the need to secure the
conditions for organised participation of:

The ESC believes that cotton seed must be added to
5.1.1.
the SSA list in the annex, as it is an extremely useful animal
feed supplement that is not produced on the islands and which
is made much more expensive owing to transport costs.

5.1.2.
The Committee is of the view that corn should be
added to the list in the annex, along with the supply of flour,
as this product contributes to preserving the traditional flour-
producing industry (water-mills/windmills).

— social partners;

— farmers’ cooperatives;

(1) OJ C 201, 26.7.1993, p. 22.

5.2. Article 3

In paragraph 1, which states that 90 % of the aid will
5.2.1.
be financed by the ‘Commission’, it might be more correct to
use the term ‘Community’.

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The Committee approves of

5.2.2.
the measure that
excludes processed products from the ban on re-exporting, as
it will encourage small local processing units.

5.2.3.
paragraph 5, instead of paragraph 4.

Paragraph 5 incorrectly refers to the prohibition in

5.3. Article 3a

5.3.1.
grouped for the purposes of
imperative and was mentioned in the annual reports.

The need to review the way in which the islands are
implementing the SSAs is

5.3.2.
The ESC fully endorses the provision made for the
Commission to revise the supply balances and the list of
products in the annex (paragraph 2).

good idea to make the Greek authorities responsible for
submitting the annual reports.

5.7.
The ESC takes the view that the amendment should
include the following among the support measures for local
products:

Indirect aid for fresh milk from local dairies, as local
5.7.1.
production does not meet demand and the minimal remaining
milk production potential is ever shrinking.

5.7.2.
Aid by hectare to encourage the production and
processing of aromatic and medicinal plants; given that the
soil and climate conditions are favourable, it would not pose a
problem for Community markets, it would put unproductive
land to good use and it would provide the local population
with an additional source of income.

5.4. Article 12

6. Conclusions

The ESC believes that the ceiling for the number of hives
(75 000) for the production of honey of a specific quality
eligible for aid should be raised, pointing out that under
Regulation (EC) No 2019/93 the ceiling for the number of
implementation was
hives eligible for the first period of
150 000.

5.5. Article 13

The ESC approves of the structural derogations to encourage
moves towards sustainable agriculture and investment in small
and medium-sized enterprises involved in the processing and
marketing of agricultural products and in agricultural holdings.

5.6. Article 15

The island authorities’ delay in collecting the data necessary
for the Commission to draft
the annual reports further
demonstrates the problematic nature of the region. It is a very

6.1.
The ESC concludes from the Commission’s previous
annual reports and the general evaluation report that the
amendment to the Regulation is a move in the right direction
and it
the
findings of the above reports and bring the Regulation up to
date on the basis of the practical results and conclusions of the
seven-year period of implementation.

therefore endorses it. The adjustments reflect

The Commission has gained more flexibility as regards
6.2.
making corrective adjustments, by adding and removing
products eligible for aid in accordance with developments in
the islands’ requirements. Naturally, every time the Com-
mission seeks to improve the programme’s efficiency, the
ESC’s comments could make its job easier.

6.3.
The ESC recognises that the Commission’s approach
to the problems facing the smaller Aegean islands is on the
right track. This approach represents a political position,
which in the Committee’s view, will
lead to research and
corresponding measures for all the Community’s small islands,
whose problems are similar.

Brussels, 16 January 2002.

The President

of the Economic and Social Committee

Göke FRERICHS