WRITTEN QUESTION E-0069/03 by Erik Meijer (GUE/NGL) to the Commission. Payment of subsidies to factories that process agricultural products rather than directly to farmers.
Date: 2003-01-23
Institutions: European Parliament, Provisional data
Subjects: agro-industry, aid to agriculture, common agricultural policy, economic support, payment, potato, production aid

C 161 E/174

Official Journal of the European Union

EN

10.7.2003

(2003/C 161 E/179)

WRITTEN QUESTION E-0069/03

by Erik Meijer (GUE/NGL) to the Commission

(23 January 2003)

Subject: Payment of subsidies to factories that process agricultural products rather than directly to farmers

Does the Commission pay some subsidies under the common agricultural policy to the agriprocess-

1.
ing industry, for example to potato starch manufacturers such as Avebe in the Netherlands?

2.
On the basis of what considerations was it decided to not to pay these subsidies directly to the
farmers who grow the potatoes, but to the industry, which can then make payments to the farmers in
proportion to the quantity of potatoes supplied?

3. Why have farmers who grow potatoes not so far been eligible for direct subsidies?

4. Why did the Commission originally intend, as a way of offsetting lower prices for agricultural
products, to move towards stopping the payments to the industry as of 2004?

5. What is now the reason for its changed plan to introduced a ‘mixed system’, whereby half of the
payments will after all be made to the industry, with the other half being paid to the farmers?

6. What advantages and disadvantages do the various scenarios have for the farmers?

7. What advantages and disadvantages do the various scenarios have for the industry?

How will the Commission prevent this scheme from amounting to a form of EU-level state aid to the

8.
industry, although it wishes to do away with this kind of state aid in other cases?

Source: the Dutch newspaper De Volkskrant of 7 January 2003.

Answer given by Mr Fischler on behalf of the Commission

(26 February 2003)

1. to 3.
cereals and starch potatoes.

Potato starch competes directly with cereal starch. The Council adopted similar measures for

Direct payment in respect of potatoes intended for starch manufacture is integrated into the common
organisation of the market in cereals governed by Council Regulation (EEC) No 1766/92 (1). It is paid to
producers of starch potatoes and may, depending on national provisions, pass via the processing industry.

In order to offset a number of structural disadvantages vis-à-vis cereal starch manufacturers, under Council
Regulation (EC) No 1868/94 (2) potato starch manufacturers also receive a premium for producing starch
within the quota limit.

In July 2002 (3) the Commission presented its reform guidelines in favour inter alia of a single
4. and 5.
payment per holding, independent of production (decoupling). After consulting the industry, it transpired
that complete decoupling of direct aid could have placed the potato starch production sector in jeopardy.
These factors led the Commission to include in its proposals (4) on the reform of the common agricultural
policy (CAP) (cid:1) a long-term perspective for sustainable agriculture (cid:1) measures for this sector which
decouple payments but retain a portion linked to production.

6. and 7.
Complete decoupling of direct aid for starch potatoes would give producers freedom of choice
to grow any agricultural product under the system of a single payment per holding; cultivation of starch
potatoes could fall sharply as producers turn to crops requiring less investment and working time, such as
cereals, resulting in a lack of raw material for the processing industry.

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Official Journal of the European Union

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Partial decoupling, as proposed by the Commission, allows producers to choose their crops while retaining
an incentive to produce starch potatoes and guaranteeing the neutrality of budget expenditure.

This system is intended for agricultural producers and does not constitute a form of state aid within

8.
the meaning of the Community rules.

(1) Council Regulation (EEC) No 1766/92 of 30 June 1992 on the common organisation of the market in cereals,

OJ L 181, 1.7.1992.

(2) Council Regulation (EC) No 1868/94 of 27 July 1994 establishing a quota system in relation to the production of

potato starch, OJ L 197, 30.7.1994.

(3) COM(2002) 394 final.
(4) COM(2003) 23 final.

(2003/C 161 E/180)

WRITTEN QUESTION E-0082/03

by Carlos Bautista Ojeda (Verts/ALE) to the Commission

Subject: Concessions on fruit and vegetables for Morocco

(23 January 2003)

The Association Agreement between the EU and Morocco is currently under negotiation.

Is the Commission aware of the socio-economic repercussions which the new concessions on fruit and
vegetables to be granted to Morocco will have on Andalusia, a region whose unemployment rate is among
the highest in the EU?

If so, can the Commission provide information on those repercussions?

Has account been taken of the opinion of the Andalusian authorities and government in the negotiations
on this new agreement?

If not, does the Commission believe that these bodies should have been consulted?

Answer given by Mr Fischler on behalf of the Commission

(14 February 2003)

An agricultural agreement between the EU and Morocco is currently under negotiation, and a new round
of negotiations was held in Rabat on 14 January 2003.

Article 18 of the Euro-Mediterranean association agreement provides that, from 1 January 2000, the
Community and Morocco are to assess the situation with a view to determining measures for the gradual
liberalisation of their agricultural trade to create a free trade area by 2012, as stipulated in the Barcelona
Declaration.

To that end, the Commission has been given clear and precise negotiating directives from the Member
States, in which Spain supported the Commission.

The Commission’s offer takes account of the requirements of the common agricultural policy (CAP) and
the sensitivity of Mediterranean products. Community proposals on these products are almost always
subject to tariff quotas and/or well-defined import schedules. The Commission’s proposal is also mindful of
balance in the fruit and vegetable sector and provides for targeted monitoring of the quantities imported
using various control systems.

In addition, the agreement provides for control and safeguard measures protecting the Community’s
interests should market disturbances occur.