Opinion of the European Economic and Social Committee on The future outlook for agriculture in areas with specific natural handicaps (upland, island and outermost areas)
Date: 2006-09-13
Institutions: European Economic and Social Committee
Subjects: agricultural policy, hill farming, island region, less-favoured agricultural area, peripheral region, rural development

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Opinion of the European Economic and Social Committee on The future outlook for agriculture in
areas with specific natural handicaps (upland, island and outermost areas)

(2006/C 318/16)

On 19 January 2005 the European Economic and Social Committee decided to draw, under Rule 29(2) of
its Rules of Procedure, on The future outlook for agriculture in areas with specific natural handicaps (upland, island
and outermost areas).

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing
the Committee's work on the subject, adopted its opinion on 11 July 2006. The co-rapporteurs were
Mr Bros and Mr Caball i Subirana.

At its 429th plenary session, held on 13 and 14 September 2006 (meeting of 13 September 2006), the
European Economic and Social Committee adopted the following opinion by 173 votes to six with
16 abstentions.

1. Conclusions and recommendations

these programmes in areas with natural handicaps are both
complementary and consistent.

The EESC considers that the existence of these areas with
1.1
specific natural handicaps (upland, island and outermost areas)
must be recognised both publicly and politically,
so that
coherent, targeted policies in line with the real needs of these
regions can then be implemented.

At a time when rural development and regional competi-
1.2
tiveness programmes are being negotiated between the Euro-
pean Commission and the European regions or Member States,
the European Economic and Social Committee wishes
to
emphasise the importance and the needs of farming in areas
with specific natural handicaps (upland, island and outermost
areas).

1.3
Bearing these handicaps in mind, the Committee calls on
the European Commission to propose policies that are genu-
inely specific to these areas, in order to coordinate the different
policies currently applying to them and to develop synergies
between existing measures.

The EESC proposes that, in the same way that platforms
1.6
such as Euromontana already exist
to promote mountain
regions, this type of cooperation should be boosted in island
and outermost regions, especially for agricultural policy issues,
and should actively involve civil society.

1.7
Given the precarious situation and the importance of
farming in these areas, the EESC considers that creating a Euro-
pean monitoring centre for such areas (upland, island and outer-
most areas) is of the utmost importance. The aim is to develop
a European vision of farming in these areas that acts as a point
of reference for following up, analysing and disseminating infor-
mation on the state of farming there and as a meeting place for
reflection and dialogue between administrations, civil society
and the different European organisations and which puts
forward European initiatives to maintain and develop farming in
these areas.

1.4
Even though the second pillar of the CAP — rural devel-
opment — is indispensable and thus a key political priority, it
has to be said that this was one of the main variables whereby
agreement could be reached on the financial perspective. Noting
this cut in budgetary resources, the Committee calls on the
Commission and the Council to steer appropriations for rural
development towards the weakest areas in the greatest need; in
other words, areas with permanent natural handicaps.

The EESC would, however, point out that there are many
1.8
other disadvantaged rural areas besides the upland, island and
outermost areas discussed in this opinion, areas with compar-
able problems in terms of
location, production costs and
climate. This applies in particular to ‘other disadvantaged areas’
and ‘areas with specific handicaps’. The EESC will look at these
issues in a subsequent opinion.

1.5
The Committee calls on the Commission and the
Member States, when drawing up rural development and
regional programmes under the Structural Funds, to ensure that

1.9
In demarcating the other disadvantaged areas, objective
location-related handicaps to agricultural use should also figure
prominently. Sufficient account should also be taken of specific
regional features.

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2. Justification

2.1

Background

— EESC opinion on The future of upland areas in the EU (1)

— EESC opinion on rural development (2)

— European Parliament resolution of 6 September 2001 on 25
years' application of Community legislation for hill and mountain
farming (3)

— EESC opinion on the outermost regions (4)

— EESC opinion on the strategy for the outermost regions (5)

— EESC opinion on The problems of agriculture in the EU's most

remote regions and islands (6).

3. Common section: areas with permanent natural handi-

caps

3.1
The regulations on rural development and regional
policy have now been adopted. It has not been easy to allocate
the funds, given the cut in the budget for these policies. The
agreement on the financial perspective 2007-2013 resulted in
lower amounts being allocated to rural development in the old
Member States and in regional policy funds being spread more
thinly.

3.2
After many years, some upland and outermost regions
suffering from permanent natural handicaps are now recognised
in the common agricultural policy and in regional policy, but
island regions do not enjoy the same recognition.

Upland areas are important in Europe: they cover one-
3.2.1
third of its territory and account for some 18 % of the EU-25's
population. The accession of Romania and Bulgaria will bring
extensive upland areas within the EU's borders. European
upland areas are extremely varied, both in their physical charac-
teristics such as topography and climate, and in their socio-
economic characteristics, such as demography, accessibility and
connections to neighbouring areas. They differ in terms of land
use and the role played by farming, in terms of social cohesion
and, even more importantly, their level of economic develop-
ment.

and the mainland; and 5) no EU capital city may be situated on
the island.

3.2.3
Any island on which an EU capital is based is excluded
according to the EUROSTAT definition. Before enlargement,
therefore, the United Kingdom and Ireland were excluded, but
two relatively small islands — Cyprus and Malta — have, since
May 2004, become EU Member States. The EESC suggests that
the definition be reviewed to include these two Member States.
This has been acknowledged by the EU in its proposal on the
new Structural and Cohesion Funds and in the Treaty estab-
lishing a Constitution for Europe, which already refers to this
point.

The outermost regions — i.e.

the French overseas
3.2.4
departments, the Azores, Madeira and the Canary Islands — are
full members of the European Union, but at the same time
present their own unique characteristics. These regions are all in
a similar situation and are characterised by a series of geogra-
phical, physical and historical factors that have a considerable
influence on their economic and social development.

3.2.5
Other specific areas that are smaller, such as peri-
urban (7) areas, wetlands or polders, can face particular handi-
caps, to which special attention should be paid in a more decen-
tralised framework for implementing European policies. The
Committee could address these issues in a subsequent opinion.

3.3
These areas suffer from permanent natural handicaps
including isolation — which results in higher marketing, supply
and service costs and makes access to markets more difficult —
and higher infrastructure, transport and energy costs.

3.4
Hence the particular importance of preserving agriculture
in disadvantaged areas in the interests of economic develop-
ment, social
life, cultural heritage (farmers make up a high
percentage of the population in these areas), balanced territorial
development and the environment.

3.2.2
EUROSTAT uses the following five criteria to define
what constitutes an island: 1) the island must cover an area of
at least one square kilometre; 2) the distance between the island
and the mainland must be at least one kilometre; 3) there must
be a permanent resident population of at least 50 inhabitants;
4) there must be no permanent physical link between the island

(1) OJ C 302 of 14.3.2003, rapporteur Mr Jean-Paul Bastian.
(2) OJ C 302 of 7.12.2004 and CES 251/2005, OJ C 234 of 22.9.2005,

rapporteur Mr Gilbert Bros.

(3) INI2000/2222, OJ C 072 of 21.3.2001.
(4) OJ C 221 of 17.9.2002, rapporteur Mr Philippe Levaux .
(5) OJ C 24 of 31.1.2006, rapporteur Ms Margarita López Almendáriz.
(6) OJ C 30 of 30.1.1997, rapporteur Mr Leopoldo Quevedo Rojo.

The recent changes to the CAP are many and far-reaching
3.5
and will
inevitably affect the sustainable development of all
European regions and, in particular, areas with specific natural
handicaps, due in particular to the weakening of the second
pillar in the case of the older Member States. A dual trend can
be seen in these developments: on the one hand, a European
response to the negotiations taking place at the WTO (World
Trade Organization) and the quest for competitiveness on inter-
national markets; on the other hand, the unrealised wish to
strengthen measures and support for protecting the environ-
ment, animal welfare and rural areas.

(7) OJ C 74 of 23.3.2005.

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The theoretical aim of the 2003 CAP reform was to
3.6
improve competitiveness and to adapt
farm production to
market needs. If left to market forces alone, however, farming in
disadvantaged areas would die out. A proactive policy is there-
fore needed to keep farming alive in these difficult areas.

3.7
It is hard to assess the impact of the reform of the ‘first
pillar’, adopted on 29 September 2003, involving decoupling,
cross-compliance and modulation, because the Member States
and regions have adopted different strategic decisions as to what
action to take. It is clear, however, that the reform entails the
risk that some forms of production will cease and/or relocate
(because there is no obligation on farmers to be productive in
order to receive direct aid), for example in the case of livestock
breeding and the fattening-up of animals for sale.

3.8
At a time when the Commission is negotiating rural
development and regional policy programmes with the Euro-
pean regions and the Member States, particular attention must
be paid to areas suffering from permanent natural handicaps in
order to ensure the territorial cohesion that is crucial to the
success of the Lisbon strategy. Basing public policy solely on
strategies to improve competitiveness would thus run counter
to the stated aims. This appears, however, to be the direction
that some EU Member States wish to take.

3.9
Farming must continue as an economic activity based on
farmers' desire to do business. This does not mean turning
disadvantaged areas into museums for outdated farming prac-
tices or into areas where the environment is the sole or predo-
minant concern. The farming sector has succeeded in devel-
oping and modernising to meet consumers' and the public's
expectations. This dynamic must be continued so as to make
the best use of farmers' capacities for innovation and enterprise.
Farming in disadvantaged areas must continue down this path
and allow an agri-food sector to develop on the basis of local
production in order to keep such areas economically viable.
State aid for regions has a special role to play here.

4. Upland regions

Introduction:

4.1
the
farming and the challenges for rural development

specific

characteristics of upland

are common constraints (or handicaps) on farming in these
areas due to the slopes, the uneven terrain and a generally harsh
climate. These constraints limit choices of production to pastu-
rage and livestock breeding. These factors also make it harder
for farming here to adapt to competition and entail higher costs
that prevent it from producing competitive low-cost products.
This type of agriculture does, however, present a number of
benefits for the sustainable development of upland areas.

land, the overgrowth of

4.1.2
Rural development issues in upland areas essentially
concern the scarcity of useable land, competition with other
activities such as forestry or urban development, the abandon-
landscapes, the
ment of agricultural
development of tourism, accessibility (or isolation), services of
general
interest and the management of water and natural
resources, and in particular the preservation of biodiversity. Ulti-
mately, they concern the safety of goods and persons thanks to
the positive roles played by farming and forestry in combating
natural risks such as landslides, flooding, avalanches or fires.

4.2 The need for a harmonised EU definition

A reminder of the position set out in the EESC opinion on The
future of upland areas in the EU (8):

There are thus significant discrepancies [in the classification of
upland areas] between Member States. Whilst a certain amount
of subsidiarity should be retained in the final designation of the
areas concerned, it would therefore be advisable to standardise
the concept of an upland area by adapting the current EU defini-
tion and specifying a range for each of the three criteria (slope,
altitude and climate).

4.2.1
As a result of the report produced by the European
Court of Auditors and the study requested by the European
Commission entitled Mountain Areas in Europe: Analysis of moun-
tain areas in EU member states, acceding and other European coun-
tries, published in January 2004 on the Internet at: http://
europa.eu.int/comm/regional_policy/sources/docgener/studies/
study_en.htm, the Commission is now in a position to produce
a standardised definition of upland areas.

4.3 The European Union must have a specific policy for upland areas

Upland farming in Europe has a number of specific
4.1.1
characteristics. Although upland areas are not
same
throughout Europe, neither in terms of environment, soil and
climate nor from an economic and social point of view, there

the

Upland farming has a unique effect on the environ-
4.3.1
ment and on the land itself. Farmers provide considerable bene-
fits for the local economy, the environment and for society as a
whole.

(8) Ibid 1.

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its

‘positive externalities’ or

‘multifunctional
These are its
nature’. Farming is an effective form of land-use planning and
natural resource management and is of central importance to
successful landscaping. These aspects are particularly crucial in
upland areas, due to their considerable water resources, upland-
specific biodiversity and the tourist attraction of almost all
upland areas. Upland farming also helps to preserve certain
animal and plant species, either by making direct use of them
(breeds of cattle or sheep exported throughout
the world
because of their traditional country flavour, or specific plant
breeds such as perfume-producing flowers, or certain cereals
that consumers are now rediscovering) or as a consequence of
farming (maintenance of rough grazing land, etc.). Agriculture
in these areas also helps to ensure a wide range of farm and
food produce for the markets, not least because it often supplies
typical and very well-known regional products for which there
is less competition and this also helps to preserve traditional
know-how. Lastly, this form of farming contributes to employ-
ment in rural areas and is closely linked to non-farming rural
activities, because in many regions a large proportion of people
hold down several jobs at once.

4.3.2
Unless we take the view that these positive externalities
could be charged for as services rendered, which is generally not
the case today, an overall reduction in support
for upland
farmers would have an immediate impact on them, speeding up
the abandonment of farms and consequently of their task of
maintaining the countryside. This is a matter of general interest,
which concerns all public decision-makers and society as a
whole. If there is a real desire to prioritise sustainable develop-
ment, this issue cannot be ignored.

4.3.3
The need to preserve productive farming in upland
areas is particularly pressing for the rural economy, to help
transform it and thus to create added value in these areas, which
will
lead to employment, growth, etc. Furthermore, produce
from upland areas is often an integral part of the particularly
rich cultural heritage of these areas, whose survival depends on
local products, such as the artisou cheese from Margeride (9)
(which forms the basis of the artisous cheese festival), Mahon
cheese or Rute aniseed.

Upland farming faces a number of specific and perma-
4.3.4
nent constraints. The implementation of the first pillar of the
CAP, which has traditionally been based on farm production
levels, has meant that upland areas consequently receive less
support under the first pillar than lowland areas. Assistance
under the second pillar is in practice of equal importance to
that provided under the first pillar in these areas. A specific
policy for upland areas must ensure that account is taken fully
and consistently of the specific problems facing upland farms,

(9) More information on this cheese: http://www.artisoudemargeride.com.

both agricultural and pastoral. This policy starts from the
premise that society must give itself the means to promote
dynamic upland agriculture, which is able to perform the tasks
of agricultural production and countryside maintenance that are
deemed crucial to the spatial planning and future development
of these areas.

4.3.5
Under the European network for rural development,
the Committee calls on the Commission to set up a thematic
working party for upland-related issues.

in the Mediterranean suffer

from both
4.3.6 Mountains
upland handicaps and those resulting from the Mediterranean
climate (such as drought, forest fires, storms, etc.). This specific
characteristic should be taken into account at European level so
that policies can be adapted at regional level.

4.4 Attaching priority to upland areas when allocating appropriations

under the second pillar

At a time when rural development budgets are falling
4.4.1
or staying at the same level in the old Member States and the
new Member States are tempted to allocate appropriations to
the areas that are most productive in the short term, the Euro-
pean Commission must ensure that EU appropriations are allo-
cated to the areas with permanent natural handicaps that need
them year after year.

4.5 Consolidating compensation measures

for upland farmers

is

crucial

4.5.1
Compensation for natural handicaps and consequently
for higher production costs is the most important measure that
can be adopted to support upland farming. No one today ques-
tions the importance of this measure, even if sufficient means
are not provided to meet its aims.

4.5.2
Farm production conditions in upland areas are basi-
cally characterised by major constraints linked to altitude,
slopes, snow and difficulties in communication. The conse-
quences of these constraints fall into two categories. They result
in higher equipment costs (buildings and materials) and trans-
port costs and also reduce the productivity of certain factors
(land ownership, capital,
labour) depending on the type of
production and the degree of handicap.

4.5.3
Lower productivity in upland farming is linked to the
shorter active lifespan of vegetation, which falls from eight
months in the lowlands to less than six at an altitude of 1000
metres. This means that at
least one-third more fodder is
required to feed an animal and, to compound the problem, this
is on land that is already less productive per fodder unit.

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is

(CAPNH)

The Compensatory Allowance for Permanent Natural
4.5.4
Handicaps
the main support mechanism for
achieving these aims. A ceiling on the allowance would be desir-
able to limit the growth of holdings that are already medium to
large, in order to maintain a sufficient number of farms, thereby
preventing desertification.

4.6 Other measures supporting upland farming must be pursued and

built on

4.6.1 Extensive grassland far ming policy

4.6.1.1
In earlier programming periods, agri-environmental
measures helped to implement a policy aimed at supporting
grassland production in areas with extensive farming. This
approach must be continued by means of measures that are
simple and accessible to the greatest number of farmers, supple-
mented by other measures that are more geared towards areas
facing specific environmental issues.

4.6.1.2
Limiting agri-environmental support to this type of
area would in fact run counter to the aim stated in the measure,
insofar as it would almost inevitably lead to farmers leaving the
profession and to the countryside returning to a state of neglect,
which would hamper the prevention of natural risks, the multi-
functional role of the areas concerned and the preservation of
biodiversity. It should be noted that, in any event, agri-environ-
mental measures that will enter into force in 2007 have actually
become more selective than before, because they now include a
mandatory unremunerated basic amount linked to farms' imple-
mentation of cross-compliance.

4.6.2 Suppor t for investment

4.6.2.1
There are a number of factors causing higher building
costs in upland areas, such as buildings having to withstand
snowfalls and heavy winds, remoteness, the greater excavation
work required and keeping animals stabled for longer periods,
thus requiring higher volumes of fodder and waste to be stored.
Higher mechanisation costs are due to the specific characteristics
of the equipment needed for working on steep terrain, to the
wear and tear it suffers as a result of the climate and the small
production runs for such equipment. Just like compensation for
natural handicaps, support for investment is a prerequisite for
farms' survival and should thus be stepped up in upland areas.

of prospects, the onerous nature of the work and the heavy
financial burden when operating capital has to be transferred;
when three farmers cease their activities, only one is replaced, in
upland areas as elsewhere.

4.6.3.2
Nevertheless, due to the fragile nature of upland
farming systems and the higher levels of investment required
than in the lowlands, it is more important than elsewhere to
encourage new generations to replace those leaving the profes-
sion and take up farming. This aim is of direct concern to
farming, but it also very much in the general interest, as empha-
sised above.

4.6.4 Compensation for the higher costs of ser vices

Higher

services

(artificial

costs of

4.6.4.1
insemination,
harvesting, etc.) are largely due to the lower density of upland
holdings, which makes transportation longer, and to transport
conditions, which are more difficult and cause more wear and
tear to vehicles. In order to meet the aim of preserving farms in
upland areas, support must be given to these services, in par-
ticular to milk collection, the cost of which is currently borne
by farmers. In the context of upland areas, the argument that
support of this nature would distort competition does not really
hold water, because market rules are not applied in all areas in
the same, undifferentiated way.

4.6.5 Suppor t for the agr i-food industr y

In order to ensure the best return on upland farm
4.6.5.1
produce,
industrial processing and marketing tools must be
available locally. But the agri-food industries are also affected by
the constraints imposed by the mountainous nature of the land,
the distance from markets, higher transport costs, and higher
construction and maintenance costs. Such a measure would also
lead to new jobs being created, which is particularly important
in rural areas.

4.6.5.2
This is why permanent support for these activities is
appropriate and necessary. The agri-food industry must be given
broad access to regional aid.

4.6.6 Suppor t for investment in agr i-tour ism

4.6.3 Getting young people into far ming and subsi-

dised loans

The trend in upland farming, as in farming every-
4.6.3.1
where, is for fewer people to join the profession due to the lack

Agri-tourism is highly developed in some of Europe's
4.6.6.1
upland areas,
in Austria for example, and provides additional
income that is crucial to the survival of farms there. Conversely,
tourism exists in these areas, and not only on farms, because of
the attraction of the landscapes and cultures that have largely
been shaped by farming.

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4.6.7 Suppor t

for the European Char ter for Quality

4.8.2 Forestr y is an essential complement.

Food Products

4.6.7.1 Most upland farms cannot compete with lowland
farms by selling mass-produced, run-of-the-mill goods at the
same price (or often at a lower price because of producers'
remoteness). In order to boost farmers' incomes, it is crucial in
upland areas even more than elsewhere to strive to ensure the
quality, authenticity and the originality of products and to estab-
lish mechanisms for improving production and structures in the
agri-food sector, thus achieving greater added value. Many desig-
nations of origin come from upland areas.

of

Adequate

protection

high-quality

4.6.7.2
agri-food
products from upland areas — meaning that consumers can
buy with confidence and that producers are properly remuner-
ated — is a major issue for the future of upland farming. This is
why the Committee is a signatory to the European Charter for
Mountain Quality Food Products (10) and hopes that the Com-
munity institutions support this initiative.

4.7 Integration of agricultural and regional policies to ensure they

have a greater impact on upland areas

4.7.1
For example, one of the aims of European regional
policy is territorial cohesion, which is barely referred to in the
CAP and has a rural dimension which could be enhanced. These
two policies
if coordinated, could have a
substantial and positive effect on sustainable development in
upland areas.

taken together,

4.8 Other points to be considered

The total surface area of upland forest is estimated to
4.8.2.1
be some 28 million hectares in the EU-15 and 31 million
hectares in the EU-25 and is growing at a faster rate than Euro-
pean forestry as a whole. Forestry is often a source of additional
income for upland farmers. Against the current backdrop of
in particular for energy, this
making better use of biomass,
could provide an additional opportunity for the sustainable
development of upland regions, provided the planting of new
forestry areas is managed rationally. Selecting species and vari-
eties that have the right mechanical properties would also
present an opportunity for upland regions and for the timber
markets, whilst helping to restrict imports from third countries,
which can cause ecological disasters.

4.8.2.2
In functional terms, upland forest ecosystems also
have their own specific characteristics. Furthermore, they play a
key role in regulating surface and underground water and are
impacts (pollution, excessive
particularly sensitive to external
wild animal populations, storms, insects) and to fires, which are
more difficult to prevent and bring under control in such areas,
where access is difficult and/or fire can spread very quickly.

4.8.2.3
only important
located below them.

The ecological stability of upland ecosystems is not
it also protects the regions

to these areas;

The Committee welcomes the European Community's
4.8.3
adoption of the agricultural protocol to the Alpine Convention.
Under this initiative, the European Commission must support
international cooperation of this type for all European upland
areas.

4.8.1 There must be a concer ted approach to dealing

with large predators.

4.8.1.1
Extensive sheep farming in European upland areas
was able to emerge and develop when large predators were
eradicated. Their reappearance (wolves in the Alps and bears in
the Pyrenees) once again threatens this form of extensive
farming, in which herds are not constantly watched over.

5. Islands

5.1 Definition

4.8.1.2
Initiatives have been put forward proposing fair solu-
tions that could reconcile the practice of pastoralism in upland
areas with protecting large predators, in particular in Italy and
Spain (effective means of protection, compensation for losses,
compensation for additional work involved in cohabiting with
predators, etc.), which should be further developed. These
experiences should be built on in other European upland areas.

(10) See the Internet site http://www.mountainproducts-europe.org/sites/

euromontana.

5.1.1 More than 10 million people, or 3 % of the European
Union's total population,
live on Europe's 286 islands, which
occupy an area of 100 000 km2 (or 3.2 % of its total area).
These 286 islands are grouped into archipelagos and it can thus
be said that there are 30 island regions. The Balearic Islands, for
example, formed by four islands according to the EU's defini-
tion, make up a single island region. Generally speaking,
farming on these 286 islands is less developed in economic
terms than in mainland Europe. Island regions generate 2.2 %
of the EU's total GDP, achieving only 72 % of the EU average.

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The islands under discussion here are basically those
5.1.1.1
in the Mediterranean, because 95 % of Europe's island popula-
tion lives on these islands, with only 5 % living on the Atlantic
and northern islands.
five Mediterranean island regions
(Sicily, Corsica, Sardinia,
the Balearic Islands and Crete) are
home to 85 % of the EU's island population.

Just

5.1.1.2
People often talk about the cost of island life, with
this being understood to be the higher cost of living on an
island; but it should be asked whether such a cost really exists.
Is it really more expensive to consume and produce on an
island than on the mainland? To answer ‘yes’ to this question,
we would need to accept the premise that the natural environ-
ment has an impact on human activity and thus on farming; in
which case it would make sense to talk about the cost of island
life.

5.2 General comments

5.2.1
Although one region differs from another in specific
respects, agriculture in the most remote regions has two features
in common: duality and dependence. Modern, ‘export-oriented’,
farming co-exists with traditional, quasi-subsistence farming and
there is a high degree of dependence on external markets, both
for supplies of inputs for the local market and as an outlet for
local produce. The trade balance clearly reveals exports of one
or two ‘specialist’ products and imports of a wide range of farm
products for internal consumption.

At all events, rural development is facing a series of
5.2.2
permanent common problems stemming primarily from the
geographical and economic isolation of these regions, exacer-
bated by the other natural handicaps already mentioned.

5.3 Specific comments

One feature of these regions is that they have permanent handi-
caps which clearly distinguish them from mainland regions and
which include:

5.3.1

General and agricultural handicaps:

— isolation from the mainland

— restricted usable land area

— restricted water supplies

— restricted sources of energy

— falling population, particularly of young people

— a shortage of skilled workers

— difficulties in waste management.

5.3.2

Agricultural handicaps:

— monoculture and the seasonal nature of their agriculture

— territorial

fragmentation, which makes their governance,
administration and economic development more compli-
cated

— restricted market size

— isolation from the major markets

— oligopolies in the supply of raw materials

— a shortage of processing and marketing infrastructures

— tough competition for land and water from flourishing

tourism

— a shortage of slaughterhouses and processing plants for local

products.

6. Outermost regions

6.1 Definition

6.1.1
The European Commission decided to adopt a joint
approach to these regions through its programmes of options
specific to the remote and insular nature of
the outermost
regions (POSEI): POSEIDOM for the French overseas depart-
ments
and Réunion);
POSEICAN for the Canary Islands and POSEIMA for Madeira
and the Azores.

(Martinique, Guadeloupe, Guiana

6.2 General comments

6.2.1
In the most remote regions agriculture is, over and
above its relative importance in regional GDP (at all events
above the Community average), a key sector for the economy
(with considerable indirect impact on transport and other allied
activities), social and labour relations stability, spatial planning,
conservation of the natural and cultural heritage, and, for stra-
tegic reasons, security of supply.

6.3 Specific comments

Natural constraints and difficulties in obtaining capital
6.3.1
goods and appropriate technology result in high production
costs.

— the absence of a favourable economic climate for businesses

— difficult access to high-quality education and health services

— the higher cost of sea and air transport communications and

infrastructure

Their products are more expensive than those from
6.3.2
mainland Europe and also have great difficulty in competing
with imports on local markets because these regions are scat-
tered, fragmented and lack adequate structures for processing
and marketing. The increasing number of hypermarkets and
major distribution networks does not exactly help to improve
this situation.

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Official Journal of the European Union

23.12.2006

Lack of economies of scale, with small and frequently
6.3.3
fragmented local markets,
the lack of partnership structures
(cooperatives, etc.), few or no slaughterhouses and small proces-
sing plants.

The new scheme which is about to take effect under
6.4.3
the future reform of
the COM in bananas, maintaining the
income of Community producers and sustaining employment,
to ensure the future of the Community's banana sector.

6.3.4
The local processing industry also suffers from similar
obstacles to development and does not have an adequate
customer-base, which gives it only very limited scope to achieve
added value.

6.4.4
The final outcome of the WTO negotiations (proposed
changes to custom tariffs). Should this prove necessary, the
appropriate measures must be taken to ensure farmers' employ-
ment and incomes in the sectors in question.

The difficulties are similar for exports: scattered and
6.3.5
fragmented supply-side structure, shortcomings in marketing
systems and infrastructure, difficulties in gaining access to distri-
bution centres at the place of destination and in reacting quickly
enough to changes in the market.

6.3.6
Falling local population, especially amongst young
people, due to people leaving for other economic sectors, espe-
cially tourism, or leaving the island regions altogether.

6.3.7
Farms — on which the role of women is crucial — are
generally small and family-run, with considerable impact on
part-time employment; extensive farming faces major obstacles
(excessive fragmentation of land and mechanisation problems).

6.4.5
Bearing in mind the general situation of these regions,
plant and animal health checks should be established and
stepped up, and all necessary human and technical resources
provided.

7. Proposals for the island and outermost regions

7.1
The Committee notes the importance of the strategic
role played by farming in these regions as a factor for social,
cultural,
territorial and environmental balance, and for a
balanced landscape.

7.2
Having studied the various documents referred to above,
the Committee notes the existence of structural handicaps to
farming in island and outermost regions.

6.3.8
Lacking a substantial industrial base, economic devel-
opment gravitates towards the tourist sector; this exacerbates
the fragility of the natural environment and places agriculture in
competition — where it is at a disadvantage — for the best
land, water and labour. The relocation of
the population
towards the coastal zones creates problems of erosion and
desertification inland.

For these reasons, the Committee considers it necessary
7.3
to draw up a set of
the European
Commission, urging it to implement specific measures to over-
remoteness,
come the handicaps arising from insularity or
which affect 16 million people in Europe and,
in particular,
farming activities in these areas.

recommendations for

6.4 Agricultural handicaps

6.4.1
Agricultural products such as tomatoes, tropical fruit,
plants and flowers have to compete on the same markets with
similar products from other countries that have concluded asso-
ciation agreements with the EU, such as the ACP group of coun-
tries, Morocco, or countries that benefit
from preferential
arrangements.

6.4.2
The POSEI agricultural programmes have not been
used to the best effect, mainly because some of the measures
have only come into force recently. Consequently, the ceilings
that have been established, giving these programmes adequate
financial resources to achieve their aims, should be respected.

7.4 With regard to island and outermost
Committee calls on the European Commission to:

regions,

the

7.4.1
Grant the status of less-favoured agricultural area
to all of these regions. The specific handicaps to farming on
the islands of Malta and Gozo (11) set an important precedent
for implementing this measure for all
island and outermost
regions.

7.4.2
Establish a scheme allocating aid for transporting
farm produce between these areas and mainland Europe
and also for inter-island transport. Subsidising transport costs
should enable farm produce from the islands and the outermost
regions to compete on an equal footing with other EU farmers
in the European market.

(11) Treaty of Accession of the Czech Republic, Estonia, Cyprus, Latvia,
Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia to the Euro-
pean Union.

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C 318/101

Establish a plan that guarantees equal prices for
7.4.3
basic agricultural inputs in these areas (such as fuel, animal
feed, machinery, etc.) to compensate for the higher production
costs involved in farming in the island and outermost regions.
Measures must be adopted to assist with importing basic animal
feed products.

outermost regions: during the 1994-1999 and 2000-2006
periods, those seven areas received 33 % more funding per
capita from the Structural Funds than the other inhabitants of
Objective 1 regions. This assistance helped to secure higher
economic growth and a more marked fall
in unemployment
rates than in many other EU regions.

7.4.4
Include European co-financing in rural development
plans and increase the percentages thereof; these plans should
include the construction of and investment in the infrastructure
needed to overcome the specific handicaps arising from an
area's remoteness or the fact that it is an island, such as plans
for irrigation using purified water, drainage systems, port and
storage infrastructure, marketing aid, etc.

Establish special measures for monitoring oligopo-
7.4.5
listic activities, which are particularly prevalent in the islands,
where the limited size of the local market favours the existence
of a few distribution companies whose trade margins are some-
times considerable. Combating these practices will help a free
market to develop in these areas.

7.5
Furthermore, with regard to measures aimed specifically
at the EU's island regions, i.e. not the outermost regions, the
Committee calls on the European Commission to:

7.5.1
Adopt specific action programmes for EU island
regions that are not outermost regions. These special
programmes, like those adopted for the outermost regions (12),
must enable island regions to achieve results similar to those
seven
achieved

the

by

Brussels, 13 September 2006.

7.5.2
In the new programming period for regional policy
(2007-2013), increase the contribution from the European
Funds to the total eligible costs, with a ceiling of 85 %, as is
already the case for the outermost regions and the most remote
Greek islands (13). The new Commission proposal (14) (for the
2007-2013 period) for islands is clearly inadequate (ceiling of
60 %).

Local and regional authorities should be allowed to
7.5.2.1
introduce the JEREMIE programme (15) in the form of an invest-
ment fund, granting financial aid to young farmers who wish to
grow food crops.

7.5.3
dealt with separately under the new Structural Funds.

The Committee proposes that island regions should be

7.6
Given the consequences of there being no specific policy
for defraying the costs of living on an island, the EESC calls for
the stakeholders,
i.e., government, civil society, etc., to unite
their efforts by creating a platform that channels and coordi-
nates all requests to solve problems, to ensure that farmers,
both men and women, continue to live and work in all island
regions.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

(12) The POSEIDOM programme for the French outermost regions,
POSEICAN for the Canary Islands and POSEIMA for the Azores and
Madeira.

(13) Regulation No. 1260/1999.
(14) COM(2004) 492 final.
(15) OJ C 110 of 9.5.2006, rapporteur Mr Antonello Pezzini.