Report from the Commission to the Council and the European Parliament on the application of Council Regulation (EC) No 2702/1999 on measures to provide information on, and to promote, agricultural products in third countries and Council Regulation (EC) No 2826/2000 on information and promotion actions for agricultural products on the internal market {SEC(2006) 1785}
Date: 2006-12-22
Institutions: European Commission
Subjects: EU financing, agricultural product, consumer information, report, sales promotion, third country

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 22.12.2006 
COM(2006) 855 final 

REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN 
PARLIAMENT 

on the application of  
Council Regulation (EC) No 2702/1999 on measures to provide information on, and to 
promote, agricultural products in third countries  
and 
Council Regulation (EC) No 2826/2000 on information and promotion actions for 
agricultural products on the internal market 

{SEC(2006) 1785} 

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

Introduction .................................................................................................................. 3 

Implementation of the promotion policy 2004–06....................................................... 3 

Appropriations and budgetary expenditure.................................................................. 4 

Programmes submitted for part-financing in 2004–06 ................................................ 5 

2.2.1.  Programmes accepted and rejected .............................................................................. 6 

2.2.2.  Programmes for third-country markets ........................................................................ 6 

2.2.3. 

Internal-market programmes........................................................................................ 7 

2.2.4.  Multi-country programmes .......................................................................................... 8 

2.3. 

Programmes managed directly by DG AGRI .............................................................. 9 

2.3.1.  Actions managed directly by the Commission under Regulation (EC) No 2702/19999 

2.3.2.  Promotion campaign for organic farming .................................................................... 9 

2.3.3.  Evaluations of the results of promotional and information actions ........................... 10 

3. 

4. 

5. 

5.1. 

5.2. 

Promotion actions carried out elsewhere ................................................................... 10 

Position of the professional organisations ................................................................. 11 

Conclusions and future action.................................................................................... 11 

General conclusions ................................................................................................... 11 

Action for the future................................................................................................... 12 

5.2.1.  Regulatory consolidation ........................................................................................... 12 

5.2.2.  Budgetary programming by proposing organisations ................................................ 12 

5.2.3.  Declaration of expenditure by the Member States..................................................... 12 

5.2.4.  Choice of implementing body.................................................................................... 12 

5.2.5.  Preparation of guidelines ........................................................................................... 12 

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1. 

INTRODUCTION 

In 2004, the Commission sent the European Parliament and the Council a report on 
measures  to  provide  information  on,  and  to  promote,  agricultural  products  in  third 
countries1. The Commission is required to present a second report two years later2. 

This report discharges that obligation. It covers the application of the two Regulations 
during the period between the earlier report drawn up in 2003, but presented in 2004, 
and  July  2006  (the  reference  period).  It  takes  account  of  all  Commission  decisions 
adopted during that period, mainly dealing with the latest enlargement of the Union 
from 15 to 25 Member States, and analyses the data on the promotion of agricultural 
products.  In  its  conclusions,  it  makes  proposals  which  could  help  simplify  and 
improve the operation of the existing promotion scheme. 

2. 

IMPLEMENTATION OF THE PROMOTION POLICY 2004–06 

Community policy on promotion uses a horizontal approach in that it covers several 
product  sectors  and  emphasises  general  characteristics  and  common  topics:  quality, 
safety,  labelling,  specific  production  methods,  respect  for  animal  welfare  and  the 
environment  at  the  production  stage,  etc.  This  policy  adds  value  to  national  and 
private  initiatives  in  that  it  supports  or  encourages  the  promotional  efforts  made  by 
the Member States and private firms. It should also enable all the Member States, in 
liaison  with  their  professional  and  interprofessional  organisations,  to  launch 
promotion and information campaigns for their products. 

Our trading partners (e.g. the United States, Japan and Australia) have acknowledged 
the need for an active promotion policy and implemented their own effective policies 
backed  by  substantial  financial  resources  to  maintain  or  increase  their  shares  of  the 
world  market.  For  example,  measures  under  a  variety  of  US  export-promotion 
programmes receive a total of some USD 145 million per year in federal government 
aid,  which  demonstrates  how  important  it  is  for  the  European  Union  too  to  play  a 
visible and effective role in export promotion. 

1 

2 

Report  to  the  European  Parliament  and  the  Council  on  the  application  of  Council  Regulation  (EC) 
No 2702/1999  on  measures  to  provide  information  on,  and  to  promote,  agricultural  products  in  third 
countries,  and  Council  Regulation  (EC)  No 2826/2000  on  information  and  promotion  actions  for 
agricultural products on the internal market, COM(2004) 233. 
Article 13  of  Council  Regulation  (EC)  No 2702/1999  (third  countries)  and  Article 14  of  Council 
Regulation (EC) No 2826/2006 (internal market), as amended by Regulation (EC) No 2060/2004. 

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2.1. 

Appropriations and budgetary expenditure 

Table 1 – EU budget appropriations for promotion actions  

Budget heading 

Promotion actions: 

(ex B1-3800 and B1-3801) 

Promotion actions: 

(ex B1-3810 and B1-3811) 

Total promotion 

*) 

IM 

TC 

IM 

TC 

Budget 
item 

05 08 04 
>=2004 
05 02 10 01 
>=2006 

05 08 05 
>=2004 
05 02 10 02 
>=2006 

) 
) 
) 

) 

) 
) 
) 

) 

€ million 

2007²) 

2006 

2005 

2004 

38 000  42 000  48 500 

48 500 

7 840  10 000  11 000 

11 000 

45 840  52 000  59 500 

59 500 

This  table  shows  the  appropriations  allocated  by  the  budgetary  authority  to 
information  and  promotion  actions  for  agricultural  products.  These  have  fallen 
steadily from €60 millions in 2004 to €52 million in 2006, a drop of about 15%, with 
a further fall planned for 2007. These reductions may be explained by the sector’s on-
going  problems  in  absorbing  the  appropriations  made  available,  resulting  in 
substantial  under-consumption,  as  Table  2  below  shows.  This  under-consumption 
resulted in the transfer at the end of the year of part of the budget originally allocated 
to these actions to other agricultural expenditure. 

Table 2 – EU budgetary expenditure for promotion actions  

Budget heading 
(payment 
appropriations) 

*) 

Budget 
item 

Promotion actions: 
payments by the Member States  
(ex B1-3800 and B1-3801)  TC 

IM 

05 08 04 
>=2004 
05 02 10 01 
>=2006 

Promotion actions: 
direct payments by the 
Commission 
(ex B1-3810 and B1-3811)  TC  05 02 10 02 

(05 08 05 

>=2004) 

IM 

Total promotion 

% implementation rate 

>=2006 

€ million 

2007 

2006 

2005 

2004 

26 000 

6 000 
32 000 

26 145 

22 118 

4 085 
30 2303 

5 119 
27 237 

5 000 

2,349 

2 568 

37 000 

²) 

32 579 

29 805 

71.1% 

54.8% 

50.0% 

)
)
)

)

)

)
)

)

²) 

End-of-year forecasts based on implementation at 30 September 2006. 

3 

Including €773 million for earlier promotion actions. 

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The main reasons for this under-consumption are: 

1. 

2. 

3. 

4. 

the  delay  in  projects  presented  by  certain  Member  States:  if,  for  example,  the 
signature  of  the  contract  between  the  proposing  organisation  and  the 
implementing  body  is  delayed,  the  expenditure  is  implemented  in  a  future 
financial year; 

the Member States delay applications for the reimbursement of expenditure; 

some under-implementation of the programmes adopted; 

in the case of directly managed actions, the lack of a voluntary contribution to 
the IOOC. 

Some proposals for reducing this degree of under-consumption are set out in Part 5 
“Conclusions and future action".  

2.2. 

Programmes submitted for part-financing in 2004–06 

During the reference period, the Member States took greater interest in the promotion 
programmes and over time virtually all of them have submitted such programmes – 
the new Member States have participated actively in this scheme since accession. 

Table 3 – Number of proposing Member States by decision 

25

20

15

10

5

0

Internal market (IM)

Third country (TC)

IM:C(2004)2000 &
TC:C(2004)817

IM:C(2004)5360 &
TC:C(2004)3536

IM:C(2005)1767 &
TC:C(2005)615

IM:C(2006)6 &
TC:C(2005)4082

IM:C(2006)3079 &
TC:C(2006)796

However,  it  should  be  noted  that  the  new  Member  States  have  concentrated  on  the 
promotion  of  their  agricultural  products  on  the  Union’s  internal  market  –  the  new 
access!
large 

market 

which 

have 

they 

now 

to 

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2.2.1.  Programmes accepted and rejected 

Since 2004, 174 promotion programmes have been accepted, comprising 128 for the 
internal market and 46 for third countries, taking all products together (see working 
paper4). In absolute terms, this figure is slightly higher than that for the initial period, 
when  there  were  94  programmes  for  the  internal  market  and  31  for  third  countries 
(see working paper). This result is all the more significant because in recent years the 
selection  criteria  have  been  applied  with  increasing  rigour.  They  also  show  that  the 
Member States’ interest in programmes for the internal market remains undiminished. 

The  main  reasons  for  rejection  during  the  reference  period  were  the  failure  of  the 
proposing organisations to give a sufficiently detailed description of the programme 
and  the  actions  it  includes  and  of  the  corresponding  budget,  the  promotion  of  a 
commercial brand and a lack of representativity of the sector. 

Table 4 – Programmes adopted and rejected up to July 2006 

Decision 

Internal market  

Proposals 
received 

Programmes accepted 

Programmes rejected 

Number 

Part-financing 
(€) 

Number 

Part-financing 
(€) 

C(2004) 2000  11/06/2004 
C(2004) 5360  28/12/2004 
C(2005) 1767  15/06/2005 
12/01/2006 
C(2006) 3079  7/07/2006 

C(2006) 6 

30 
34 
32 
40 
79 

26 
20 
26 
25 
31 

10 721 161 
24 068 756 
26 130 535 
25 459 807 
27 660 899 

Totals 

215 

128 

114 041 158 

Third countries 

C(2004) 817  22/03/2004 
C(2004) 3536  27/09/2004 
C(2005) 615  14/03/2005 
C(2005) 4082  21/10/2005 
C(2006) 796  17/03/2006 

Totals 

6 
10 
18 
25 
12 

71 

5 
8 
10 
15 
8 

46 

3 016 781 
5 027 325 
10 182 124 
13 239 540 
8 186 583 

39 652 353 

4 
14 
6 
15 
48 

87 

1 
2 
8 
10 
4 

25 

832 985 
11 075 424 
7 357 163 
16 227 822 
49 942 266 

85 435 660 

632 502 
1 868 550 
7 976 353 
12 462 386 
4 203 229 

27 143 020 

To understand fully this table and the statistics in this report, it should be remembered 
that,  until  2005,  each  year  the  Commission  adopted  two  decisions  on  the  internal 
market and two decisions on the markets in third countries. From 2006, a change in 
the rules has reduced the number of decisions from four to two per year.  

2.2.2.  Programmes for third-country markets 

During the reference period these programmes accounted for only about 25% of those 
proposed.  Similarly,  in  terms  of  part-finance,  they  received  about  a  quarter  of  the 
Community funds allocated to the promotion programmes accepted. 

North America was the main target country, followed by Russia and Japan. 

As  regards  the  products  promoted  on  third-country  markets,  the  first  place  clearly 
went to those bearing a quality label (AC, PDO, TSG), followed by wines and spirits, 

4 

The references refer to the working paper which the Commission is presenting with this report. 

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fresh  and  processed  fruit  and  vegetables,  and  quality  meats.  The  graph  below)  is 
telling in this connection: 

Table 5 – EC contribution by product – third countries 

o
r
u
E
n
o

i
l
l
i

M
n
I

9,00

8,00

7,00

6,00

5,00

4,00

3,00

2,00

1,00

0,00

7,90

5,63

4,93

5,71

4,06

2,06

2,99

2,54

0,53

0,40

1,46

1,44

Fresh fruit and vegetables
Milk and milk products

Ornamental horticulture
Olive oil and table olives
Processed fruit and vegetables
PDO, PGI and TSG
Organic farming and Products
Processed Cereals & Rice
Multi Products

Quality Meat

Spirit Drinks

Wines

2.2.3. 

Internal-market programmes  

Product Sector Label

The number of programmes submitted rose from 64 in 2004 to 72 in 2005 and to 79 
in 2006, an increase of 23.4%. The number accepted rose from 46 in 2004 to 51 in 
2005 but fell to 31 in 2006. The application of more rigorous criteria in considering 
these programmes undoubtedly contributed to this reduction. 

As can be seen from the graph below (see also working paper), all eligible products 
other  than  textile  flax  were  the  subject of  promotion  programmes  during  the  period 
covered  by  this  report.  The  main  beneficiary  sectors  in  budgetary  terms  were  milk 
and  milk  products,  fresh  and  processed  fruit  and  vegetables,  ornamental  plants  and 
shrubs, organic farming and quality meats. 

The  countries  targeted  by  internal-market  programmes  are  shown  in  the  annexed 
tables.  It  is  interesting  to  note  that  while,  since  the  beginning  of  the  promotion 
scheme,  in  half  the  cases  the  target  country  was  the  one  proposing  the  programme 
(see working paper), this trend diminished significantly in the period 2004-06. 

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Table 6 – EC contribution by product – internal market  

o
r
u
E
n
o

i
l
l
i

M
n
I

25,00

20,00

15,00

10,00

5,00

0,00

22,94

17,97

14,19

12,84

11,20

9,02

6,28

1,40

0,53

3,36

4,04

2,23

2,25

3,08

2,70

Fresh fruit and vegetables
Olive oil and table olives
Ornamental horticulture
Processed fruit and vegetables
PDO, PGI and TSG
Labelling of eggs
Honey and beekeeping products
Outermost Regions
Organic farming and Products
All agricultural products
Multi Products
Milk and milk products

Quality Meat

Seed oils

Wines

2.2.4.  Multi-country programmes 

Product Sector Label

It  is  also  interesting  to  note  the  comparatively  small  share  taken  by  multi-country 
programmes  in  the  total  number  of  programmes  proposed,  whether  for  the  internal 
market or third countries:  

Table 7 – Share of programmes covering several Member States 
in the total number of programmes proposed 

Decision 

Internal market  

Programmes 
proposed 

Multi-MS 
programmes 
proposed 

C(2004) 2000 
C(2004) 5360 
C(2005) 1767 
C(2006) 6 
C(2006) 3079 

11/06/2004 
28/12/2004 
15/06/2005 
12/01/2006 
7/07/2006 

Totals 

Third countries 

C(2004) 817 
C(2004) 3536 
C(2005) 615 
C(2005) 4082 
C(2006) 796 

22/03/2004 
27/09/2004 
14/03/2005 
21/10/2005 
17/03/2006 

Totals 

30 
34 
32 
40 
79 
215 

6 
10 
18 
25 
12 
71 

0 
2 
2 
2 
6 
12 

1 
1 
5 
1 
1 
9 

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2.3. 

Programmes managed directly by DG AGRI 

It  has  already  been  stated  that  certain  actions  may  be  financed  100%  by  the  EU 
budget.  These  are  actions  launched  and  managed  directly  by  the  Commission  and 
implemented by contractors selected through a call for tenders. 

2.3.1.  Actions managed directly by the Commission under Regulation (EC) No 2702/1999 

1.  Organisation of information campaigns in the United States and Canada, China 
and Japan on Community schemes for protected designations of origin (PDO), 
protected  geographical  indications  (PGI),  traditional  specialties  guaranteed 
(TSG) and organic farming, 

annual  budget:  €2  million  (€1  million  for  North  America  and  €1  million  for 
Asia). 

2.  High-level missions: 

in  2004,  visit  to  China  by  a  trade  mission  led  by  Mr Franz Fischler,  then 
Member of the Commission responsible for agriculture and fisheries, 

budget: €800 000; 

in  March  2007,  organisation  of  a  high-level  trade  mission  to  India  by  Ms 
Marianne  Fischer  Boel,  Member  of  the  Commission,  accompanied  by  a 
delegation of business leaders. The aim of this mission, which will last six days, 
is  to  build  bridges  between  the  EU  and  India.  It  will  visit  New  Delhi  and 
Bombay and also include a European Union stand at the Aahaar agri-food fair 
in New Delhi.  

budget: €1 million  

2.3.2.  Promotion campaign for organic farming 

The Commission launched a promotion campaign based on Council Regulation (EC) 
No 2826/2000 in order to follow up action 1 of the European plan for organic food 
and  farming.  This  programme  lasts  for  three  years  and  has  a  total  budget  of  €3 
million. The campaign will run in parallel with national programmes part-financed by 
the European Union in this rapidly expanding sector and is intended to support these 
initiatives. 

Following  a  call  for  tenders,  a  framework  contract  was  concluded  with  a  specialist 
company  to  develop  an  internet  site  and  a  ‘toolbox’  containing  various  instruments 
which  could  be  used  to  promote  organic  farming  and  provide  information  on  its 
products. Other information, communication and promotion measures may be carried 
out as needed as part of this campaign, without forgetting promotion as such aimed at 
the target publics. 

A group of experts, including  several leading specialists in the sector, appointed by 
the  Commission  on  proposals  from  the  Member  States,  will  be  advising  the 
Commission during this exercise. 

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2.3.3.  Evaluations of the results of promotional and information actions 

The  evaluation  exercises  look  at  the  effectiveness  of  the  programmes,  verifying  the 
attainment  of  objectives  and  ensuring  that  the  resources  (financial,  legislative, 
administrative, etc.) have been correctly allocated to secure the results obtained. They 
also check their consistency, relevance and usefulness and the quality of the actions 
planned. 

Articles  8  of  Council  Regulations  (EC)  Nos  2702/1999  and  2826/2000  allow  the 
Commission to carry out evaluations of the programmes part-financed.  

An  evaluation  of  the  communication  programmes  part-financed  under  Commission 
Regulation (EC) No 1358/2001 laying down specific communication measures in the 
beef and veal sector was launched through a call for tenders in 2004 and finalised in 
2005.  It  demonstrated  that  the  programmes  part-financed  complied  with  the 
objectives  and  guidelines  laid  down.  However,  as  regards  content,  the  lack  of  a 
common strategy for these programmes meant that clear information was not always 
available  to  reassure  the  consumer.  Similarly,  the  lack  of  initiatives  to  measure  the 
impact  of  the  actions  in  the  programmes  when  they  were  carried  out  made  it  very 
difficult to assess their effectiveness even several years later.  

For the future, following calls for tenders, the Commission has signed two framework 
contracts for evaluations both on the internal market and in third countries. Each of 
these  will  last  from  four  to  six  months  and  look  at  how  the  programmes  were 
implemented. 

The total budget for the two framework contracts is €3 750 000.  

3. 

PROMOTION ACTIONS CARRIED OUT ELSEWHERE 

Besides the actions part-financed on the basis of the above Regulations and covered 
by  this  report,  there  are  a  number  of  promotion  and/or  information  actions  for 
agricultural products under other aspects of the common agricultural policy: 

– 

– 

– 

– 

sectoral promotion actions for fruit and vegetables, 

sectoral  promotion actions under the market organisation for wine, now being 
revised, 

actions under the state aid policy, 

actions  under  the  rural  development  policy,  where  the  range  of  supporting 
measures  introduced  under  Regulation  (EC)  No  1257/19995  was  expanded 
Regulation (EC) No 1783/20036. 

5 

6 

Council  Regulation  (EC)  No  1257/1999  of  17  May  1999  on  support  for  rural  development  from  the 
European  Agricultural  Guidance  and  Guarantee  Fund  (EAGGF)  and  amending  and  repealing  certain 
Regulations (OJ L 160, 26.6.1999, p. 80). 
Council  Regulation  (EC)  No  1783/2003  of  29  September  2003  amending  Regulation  (EC) 
No 1257/1999  on  support  for  rural  development  from  the  European  Agricultural  Guidance  and 
Guarantee Fund (EAGGF) (OJ L 270, 21.10.2003, p. 70). 

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4. 

POSITION OF THE PROFESSIONAL ORGANISATIONS 

At  a  meeting  of  the  advisory  group  on  12  September  2006,  the  professional 
organisations  representing  producers  were  informed  of  progress  in  preparing  this 
report.  On  that  occasion,  they  informed  the  Commission  of  their  views  on  the 
operation of the scheme: 

1. 

2. 

they sought simpler rules, particularly as regards multi-country programmes; 

they  wanted  a  clearer  definition  of  whether  brands  could  appear  as  part  of  a 
generic promotion; 

3. 

they wanted guidelines for formulating their programmes. 

5. 

CONCLUSIONS AND FUTURE ACTION 

5.1. 

General conclusions 

The changes to the Regulations made at the end of 2004 and in 2005 mean that it is 
still  too  early  to  reach  a  final  judgement  on  the  results  of  the  promotion  actions 
launched since the end of the period covered by the previous report. However, since 
that  report,  the  basic  principles  of  the  promotion  scheme  have  demonstrated  their 
value and effectiveness: “indirect” management by the Commission, under which the 
professional  organisations  and  the  Member  States  take  the  initiative  and  are 
responsible for management;  

– 

– 

– 

for  all  eligible  sectors,  harmonised  tripartite  part-financing  (European  Union, 
Member States and professional organisations), with however the possibility of 
co-financing in equal shares in certain clearly defined cases; 

insistence  on  the  generic  nature  of  Community  promotion,  with  the  stress  on 
sectors and themes rather than a particular product;  

regulatory framework allowing the programming of actions at regular intervals, 
rather than intervening as a reaction to crisis situations. 

With  the  aim  of  achieving  further  improvements,  the  following  points  could  be 
considered: 

– 

– 

– 

the  professional  organisations  and  the  Member  States  have  expressed  great 
interest in launching programmes on the internal market. It should however be 
noted  that  some  of  their  proposals  are  primarily  of  national  interest  and  add 
little value at European level. There should be greater stress on the preparation 
of  programmes  which  are  of  interest  at  Community  level  and  on  the  need  to 
assistance  between  national 
encourage  better  design 
administrations; 

and  mutual 

the professional organisations show less enthusiasm vis-à-vis third countries; 

the  growing  interest  in  promotion  actions  by  professionals  in  the  sectors  of 
agriculture reformed, or being reformed, under the CAP. 

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5.2. 

Action for the future 

The Commission considers that the present scheme of support for promotion actions, 
as  defined  in  Regulations  (EC)  Nos 2702/1999  and 2826/2000,  should  continue  to 
apply, with the main lines of these provisions retained. To improve the operation of 
certain specific points, the following changes could be proposed. 

5.2.1.  Regulatory consolidation  

It would be useful to simplify the rules by: 

– 

– 

combining the two basic Council Regulations, on the internal market and third 
countries, into a single text, 

combining  the  two  Commission  implementing  Regulations,  on  the  internal 
market and third countries, into a single text. 

5.2.2.  Budgetary programming by proposing organisations 

To  improve  compliance  with  budgetary  commitments  in  any  particular  year,  the 
annual  programming  of  expenditure  should  relate  to  specific  financial  years  rather 
than “12-month periods”. 

5.2.3.  Declaration of expenditure by the Member States 

To  allow  regular  monitoring  of  the  consumption  of  budgetary  commitments, 
expenditure implemented under the programmes should be paid and declared quickly 
enough to allow compliance with the commitments made during a particular financial 
year. 

5.2.4.  Choice of implementing body 

The  possibility  of  choosing  the  implementing  body  after  the  proposing  organisation 
has  sent  the  programme  to  the  Member  States  should  be  retained,  but  with 
clarification allowing a judicious use of this faculty. 

5.2.5.  Preparation of guidelines 

The  preparation  of  guidelines  which  are  clear  and  durable,  to  be  respected  when 
preparing  proposals  for  promotion  programmes  to  be  part-financed,  would  improve 
clarity  and  reduce  gaps  in  the  formulation  of  the  programmes.  These  guidelines, 
which  are  currently  being  prepared,  will  undoubtedly  enhance  the  promotion  of 
agricultural products in future. 

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