Opinion of the Economic and Social Committee on the "Proposal for a Council Regulation fixing the premiums and guarantee thresholds for leaf tobacco by variety group and Member State for the 2002, 2003 and 2004 harvests and amending Regulation (EEC) No 2075/92"
Date: 2002-02-20
Institutions: European Economic and Social Committee
Subjects: EU control, agricultural guidance, fund (EU), guarantee threshold, product quality, tobacco

C 94/14

EN

Official Journal of the European Communities

18.4.2002

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation fixing
the premiums and guarantee thresholds for leaf tobacco by variety group and Member State for
the 2002, 2003 and 2004 harvests and amending Regulation (EEC) No 2075/92’

(2002/C 94/05)

On 7 December 2001, the Council decided to consult the European 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 European Economic and Social Committee instructed the
Section for Agriculture, Rural Development and the Environment to prepare the Committee’s work on
the subject.

Owing to the urgent nature of the opinion, the 388th EESC plenary session of 20 and 21 February 2002
(meeting of 20 February) appointed Mr Liolios as rapporteur-general and adopted the opinion by 55 votes
to 34 with three abstentions.

1.

Introduction

1.1.
In conjunction with the interim review of Community
provisions for the common organisation of the market for
tobacco, the European Commission drew up the present draft
regulation, to be submitted to the Council, in which it makes
the following proposals:

1.1.1.
For the 2002 harvest, premiums will remain at the
same level as for the previous years for all variety groups, with
the exception of Group V, where the premiums will be cut by
10 %.

1.1.2.
For the 2003 harvest, premiums in all variety groups
will be cut by 1 %, while for the 2004 harvest, all premiums
will decrease by 3 %, owing to the increased deduction for the
Community Tobacco Fund.

For certain varieties, the payment of additional sums
1.1.3.
will continue, owing to increased production costs in tobacco-
producing countries.

Guarantee thresholds (quotas) will be brought down
1.1.4.
for all variety groups and particularly variety groups I, II, III
and V. More specifically, the situation will look like this:

Variety
group

Quota reduction
2002 harvest

Quota reduction
2003 harvest

Quota reduction
2004 harvest

(cid:201)

(cid:201)(cid:201)

(cid:201)(cid:201)(cid:201)

(cid:201)V

V

V(cid:201)

V(cid:201)(cid:201)

VIII

0,5 %

1 %

1 %

0,5 %

1 %

0,5 %

0,5 %

0,5 %

1,5 %

3,5 %

3,5 %

—

3,5 %

—

—

—

—

—

—

—

—

—

—

—

1.1.5.
Under the existing set-up, provided they inform the
European Commission in good time, Member States can apply
the auction system to all cultivation contracts (for all variety
groups). The proposed change gives Member States the
possibility of applying the auction system to cultivation
contracts for certain variety groups only.

1.1.6.
The draft regulation does away with the national
quota reserves, which were to be funded by a 0,5-2 % levy on
all quotas, for distribution to new or existing tobacco growers
with a view to ensuring their holdings were viable.

1.1.7.
The draft regulation redefines the scope and financing
of the Tobacco Fund’s activities while increasing its resources
significantly (2 % deduction on premiums for the 2002
harvest, 3 % for the 2003 harvest and 5 % for the 2004
harvest). More specifically, the agronomic research dimension
will be replaced by activities and measures aimed at developing
alternative sources of
income and economic activity for
growers, while public information campaigns on the harmful
effects of tobacco consumption will be stepped up.

The overall financial impact of the proposed Regu-
1.2.
lation will amount to EUR 61,4 million, resulting from cuts in
premiums and quotas. The breakdown is as follows:

1.2.1.
EUR 31,4 million will be saved for the Community
budget from the 10 % cut in premiums for variety group V
and the reduction in guarantee thresholds (quotas) for all
varieties.

The Community Tobacco Fund will benefit from an
1.2.2.
extra EUR 30 million for the 2003-2004 period (approxi-
mately EUR 10 million for 2003 and EUR 20 million for

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Official Journal of the European Communities

C 94/15

2004), owing to the increased deduction for the Tobacco Fund
from the premiums for all variety groups (1 % for the 2003
harvest and 3 % for 2004).

2.8.
The EESC also regards as excessive the proposal to
reduce by 10 % the premiums for Group V tobacco varieties,
which jeopardises the restructuring programmes successfully
applied to them by the Member States with the voluntary
participation of producers.

2. General comments

2.1.
In the European Commission communication ‘A sus-
tainable Europe for a better world: A European Union strategy
for Sustainable Development’ (1)), it was proposed that the
emphasis of EU agricultural aid should be reoriented so as to
reward healthy, high quality, products and practices rather
than quantity.

2.2. With this in mind the Commission, in its proposal
fixing the premiums and guarantee thresholds for leaf tobacco,
has indicated that, following the 2002 review, the tobacco
regime should be adjusted.

2.3.
The EESC takes into account this general approach but
would point out that the final review and position must
be undertaken also in conjunction with the Commission’s
presentation of its review and proposal for raw tobacco.

Since the tobacco sector is of major regional import-
2.4.
ance for less favoured areas, and in particular provides
employment for small holdings, it is vital that the European
Commission in every way makes an immediate start on work
to frame proposals for alternatives.

2.5.
The EESC notes that the resources allocated to the
Community Tobacco Fund since 1996 have not been much
used up to now.

2.6.
The EESC emphasises the negative experience of the
voluntary abandonment of tobacco-growing by tens of thou-
sands of producers of Group V varieties in 1993/1994,
most of whom, after the expiry of the three years of aid
(compensation) from the European Union, are unemployed.
Very few of them were able to switch to another activity in a
different sector. The regions where this programme was
applied now find themselves in a situation of economic
disarray and stagnation.

The EESC regards as excessive the draft regulation’s
2.7.
proposed reduction in quotas particularly for Groups I and II,
whose varieties are among those for which there is the greatest
commercial demand. European tobacco producers have in
recent years made technical and agronomic improvements
with a view to adapting production to market needs. Moreover,
the current situation of the raw tobacco market does not call
for any reduction in guarantee thresholds.

2.9.
As regards the proposed provisions on cultivation
contract auctions and the national quota reserve, the EESC
takes the view that the proposals are positive and that by their
very nature they are likely to facilitate the proper functioning
of this type of activity, simplify administrative management
and reduce red tape. However, with a view to harmonising
Community rules more effectively with the rules of certain
the
Member States, care must be taken to ensure that
‘cultivation and delivery contract’ provided for cooperatives in
some national regulations,
is considered equivalent to the
‘cultivation contract’ provided for in the existing Community
legislation (Art. 9 of Regulation (EC) No 2848/98).

2.10.
Since the Community Tobacco Fund involves a
deduction at source of a percentage of the premium granted to
producers, any rise in that percentage means a corresponding
reduction in the actual amount of the premium. The proposal
needs to be examined with care, as it entails a significant
reduction in the premiums’ value. The EESC believes that the
proposed increase for the Community Tobacco Fund, without
a prior review of the management of that Fund — especially
as regards the use of the money and the research results —
does not seem to be either legal or correct.

2.11.
Finally, the EESC would like to mention the EP’s
position regarding Recital 5 of the Commission proposal as
presented in its draft report (2) on the same subject:

‘This recital, in the wording proposed by the Commission,
prejudges on the basis of what is only a consultation paper
the final outcome of the decisions to be taken in due
course on the future tobacco regime. Furthermore, it does
so without taking into account two factors: firstly the fact
that the European Council in Göteborg did not approve
the Communication, but confined itself to calling on the
Council to examine proposals with a view to the appli-
cation of the European Strategy for Sustainable Develop-
ment; secondly, the Commission itself envisages a set of
provisions for sectors which may be directed affected by

(1) COM(2001) 264 final.

(2) PE 307.209 of 9 January 2002, Justification for Amendment 1,

p. 5 (Rapporteur: Mr Cunha).

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the process of adaptation, as is the case for the tobacco
sector. Consequently, a paragraph from the Communi-
cation cannot be taken out of context, as is done in
recital 5, ignoring the rest of the provisions and proposals.
Furthermore, it must be borne in mind that the debate on
the future of the COM in tobacco remains open, pending
studies which the Commission has undertaken to submit
during 2002.’

2.11.1.
For the above reasons, the EESC considers that any
sudden change in the sector would be premature and would
have unpredictable social and economic consequences. With-
out
the sectoral study having been duly submitted and
evaluated (this is expected at the end of 2002), such comments
as that in Recital 5 of the proposal contradict the previous
positions of the European Commission. The EESC therefore
considers that for reasons of consistency Recital 5 should be
removed from the proposal.

3. Specific comments

The EESC points to the considerable delay on the
3.1.
Commission’s part
in submitting its proposal. The final
decisions will, in all probability, be taken after cultivation has
already started, which will undermine the work of farmers and
the processing industry and seriously disrupt the functioning
of the market.

For the above reasons, the EESC asks the European

3.2.
Commission:

a)

to extend the current tobacco regime and the validity of

Brussels, 20 February 2002.

Regulation (EC) No 660/1999 (1) for a further three years
(2002-2004), maintaining current premium levels and
the guarantee thresholds (quotas) for all variety groups.
The EESC in any case recommends to the European
Commission that future amendments should take effect
as of 2003, and that last year’s regime (2001) should be
maintained for the year 2002;

b)

to maintain at current levels throughout the three-year
period 2002-2004 the 2 % deduction for premiums for
the Community Tobacco Fund, as provided for in Council
Regulation 1636/1998 (2) and to continue to include
agronomic research among the measures supported by
the Fund.

3.3.
The EESC endorses the Commission’s efforts to encour-
age the Member States to establish action plans using funds
from the Community Tobacco Fund, but thinks it is going too
far in proposing to increase the deduction, on the basis of the
interim review and without a prior assessment of the Fund.
Any deduction from tobacco producers’ premiums to finance
the Fund should be delayed provisionally until the resources
accumulated to date have been effectively deployed so as to
ensure that the Community Tobacco Fund is working.

(1) Council Regulation (EC) No 660/1999 of 22 March 1999
amending Regulation (EEC) No. 2075/1992 and fixing the
premiums and guarantee thresholds for leaf tobacco by variety
group and Member State for the 1999, 2000 and 2001 harvests,
OJ L 83, 27.3.1999, pp. 10-14.

(2) Council Regulation (EC) No 1636/98 of 20 July 1998 amending
Regulation (EEC) No 2075/92 on the common organisation of
the market in raw tobacco, OJ L 210, 28.7.1998, pp. 23-27.

The President

of the Economic and Social Committee

Göke FRERICHS

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APPENDIX

to the Opinion of the Economic and Social Committee

(Rule 47 of the Rules of Procedure)

The following amendment, which received at least one quarter of the votes cast, was defeated in the course of the
Committee’s debates:

Delete and replace the entire text as follows:

‘1.

Introduction

The Commission’s proposal is fully consistent with its earlier communication “A Sustainable Europe for a
1.1.
better world: A European Union Strategy for Sustainable Development” (1). The phasing out of tobacco subsidies is
proposed, along with measures to develop alternative sources of income and economic activity for tobacco industry
workers and tobacco farmers.

The proposal states that a review is under way of the common organisation of the market for raw tobacco,

1.2.
which will make it possible to anticipate the impact Community legislation will have on the raw tobacco sector.

1.3.
The proposal’s provisions form part and parcel of Community measures to reduce the threat to public health
and to reorientate EU agricultural support so as to reward healthy, high quality products and practices rather than
quantity.

2. General comments

The EESC welcomes the Commission’s proposal for a Regulation fixing the premiums and guarantee thresholds for
leaf tobacco and supports both the proposal to give immediate notice of the intention to phase out tobacco subsidies
and the technical sections in which the Commission proposes amendments to the existing Regulation (EEC)
No 2075/92.’

Reason

The Commission’s proposal is objective and fully consistent with ‘A Sustainable Europe’ communication. The draft
opinion is inconsistent with these principles. I propose that the EESC back the Commission’s proposal.

Result of the vote

For: 44, against: 55, abstentions: 3.

(1) COM(2001) 264 final.