Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation amending Regulations (EEC) No 404/93, (EC) No 1782/2003 and (EC) No 247/2006 as regards the banana sector COM(2006) 489 final — 2006/0173 (CNS)
Date: 2006-12-13
Institutions: European Economic and Social Committee
Subjects: EU aid, aid to agriculture, common commercial policy, market organisation, regional aid, tropical fruit

30.12.2006

EN

Official Journal of the European Union

C 325/41

Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation
amending Regulations (EEC) No 404/93, (EC) No 1782/2003 and (EC) No 247/2006 as regards the
banana sector

COM(2006) 489 final — 2006/0173 (CNS)

(2006/C 325/11)

On 26 October 2006, the European Economic and Social Committee, acting under Rule 29(2) of its Rules
of Procedure, decided to draw up an own-initiative opinion on the abovementioned proposal.

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 8 November 2006. The rapporteur was
Mr Espuny Moyano.

At its 431st plenary session, held on 13 and 14 December 2006 (meeting of 13 December), the European
Economic and Social Committee adopted the following opinion by 134 votes in favour with six abstentions.

1. Conclusions and recommendations

the Commission shall present a specific
import regime,
report before 31 December 2009, accompanied where
appropriate by the necessary proposals.’

The Committee recognises

1.1
the need to reform the
current aid scheme for Community banana producers, and
therefore welcomes the Commission's proposal. However,
it
considers that it is too early to assess the impact on producer
incomes of the new flat tariff regime that came into force on
1 January 2006, and of which the proposal fails to take due
account.

The Committee proposes the following amendments to

1.2
the fifth recital of the draft regulation:

‘Title III of Council Regulation (EC) No 247/2006 of 30
January 2006 laying down specific measures for agriculture
in the outermost regions of the Union provides for the
establishment of Community support programmes for the
outermost regions containing specific measures to assist
lines of agricultural production. This Regulation
local
provides for a review not later than 31 December 2009. If
there are substantial changes to the economic conditions
affecting livelihoods in the outermost regions, the Commis-
sion shall submit the report sooner. However, in order to
the highly particular situation of Com-
take account of
munity banana producers, the Commission shall submit a
specific report before this date if these producers' incomes
fall as a result of the amendments to the import regime.
This instrument seems best adapted to support banana
production in each of the regions concerned by providing
for
to
flexibility and decentralisation of mechanisms
support banana production. The possibility of
including
banana support in those support programmes should rein-
force the coherence of the strategies for support of agri-
cultural production in these regions.’

The Committee proposes that,

in Article 3(2), a new
1.3
paragraph 3.1 to Article 28 of Regulation (EC) No 247/2006 be
inserted:

The Committee proposes an amendment to Article 30 of

1.4
Regulation 247/2006, inserting the following paragraph:

‘The European Commission may authorise the Member
States to include a dedicated advance payment scheme for
banana producers in their support programmes.’

2. General comments

The banana sector is a highly specific one, which is why
2.1
it has its own CMO. Its main particularities are: most Com-
munity production takes place in outermost regions which, as
recognised by Article 299(2) of the Treaty, are affected by a
series of specific difficulties;
their production supplies only
16 % of the Community market; and the world banana market
is virtually a oligopoly, since marketing is controlled by five
major companies.

2.2
This proposal by the European Commission, which was
adopted after a lengthy process of external and internal consul-
tation, entails a radical change in the current support scheme
for Community banana production. The present system of
support based on the principle of compensatory
internal
payments, with aid varying each year depending on the level of
banana prices,
is to be replaced by aid divided into national
envelopes, to be integrated into the relevant Posei programme
for the outermost regions, and into the single payment system
for other production areas.

‘In the event of a worsening of the economic conditions of
to the
banana producers as a result of an amendment

2.3
tions:

The proposal entails reforming three Community regula-

C 325/42

EN

Official Journal of the European Union

30.12.2006

Regulation 404/93,

the banana CMO. Title

II
2.3.1
(producers' organisations and concentration mechanisms), Title
III (compensatory aid scheme, operational programmes, grub-
bing-up premium) and a number of articles from Titles IV and
V, rendered obsolete by the replacement of
the tariff quota
scheme by a tariff-only one, are deleted, and some articles of
Title V are amended: the Management Committee for Bananas is
abolished (references to it are to be construed as being to the
Management Committee for Fresh Fruit and Vegetables), and the
provision requiring an annual report under Regulation 404/93
is removed.

regions under

Regulation 1782/2003,

2.3.2
the 2003 CAP reform. The
relevant articles are amended in order to bring bananas not
produced in outermost
the single payments
the national ceilings are amended for
scheme. To this end,
Greece (+ EUR 1.1 million), Portugal (+ EUR 0.1 million) and
Cyprus (+ EUR 3.4 million). These Member States will establish
the reference amounts and the number of eligible hectares to
receive single payments based on a representative period
between 2000 and 2005.

2.3.3
Regulation 247/2006, Posei agricultural products. The
Posei budgets are increased by EUR 278.8 million: Poseican
EUR 141.1 million, Poseidom EUR 129.1 million and Poseima
EUR 8.6 million.

that

The Committee

2.4
the Commission's
considers
proposal involves a certain abandonment of its responsibility to
the Community banana production sector, since in practice it
empties the banana CMO of its content, transferring financial
support for this product to the general budget for the Posei
programmes, with no specific chapter for bananas.

Brussels, 13 December 2006.

The Committee welcomes the European Commission's
2.5
proposal for a system of fixed national budget envelopes, but is
concerned that the ensuing overall budget will be insufficient in
the event of a major fall in Community prices as a consequence
of the greater market liberalisation brought about by the new
trends following the
likely market
import
current international trade negotiations.

regime, and of

3. Specific comments

3.1
The Commission should find an alternative means of
maintaining the Community framework of banana producer
organisations, since European banana production is highly frag-
mented. It consists mostly of small producers who have to sell
their produce on a highly competitive market, meaning that
major concentration of supply is necessary. The Committee
believes that this Community framework of producer organisa-
tions could be maintained by retaining a number of the provi-
sions of Title II of Regulation (EC) No 404/93, specifically Arti-
cles 5, 8 and 9.

3.2
Bananas are a highly intensive crop, requiring year-round
maintenance. This entails constant expenditure, principally on
account of the intensive labour involved and use of irrigation.
This is why the present scheme established an advance payment
system, which should be retained.

3.3
The Commission's proposal should be more specific
concerning the content of the report to serve as the basis for
proper measures in the event of loss of income on the part of
producers under the impact of the new import regime.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS