Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation laying down specific rules as regards the fruit and vegetable sector and amending certain Regulations COM(2007) 17 final — 2007/0012 (CNS)
Date: 2007-05-31
Institutions: European Economic and Social Committee
Subjects: agricultural policy, common organisation of markets, fruit, vegetable

27.7.2007

EN

Official Journal of the European Union

C 175/53

Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Regulation
laying down specific rules as regards the fruit and vegetable sector and amending certain
Regulations’

COM(2007) 17 final — 2007/0012 (CNS)

(2007/C 175/14)

On 14 February 2007 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 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 May 2007. The rapporteur was Mr Campli.

At its 436th plenary session, held on 30 May 2007, the European Economic and Social Committee adopted
the following opinion unanimously.

1. Conclusions and recommendations

The EESC believes that the aims of the reform, if they are
1.1
pursued as a whole, can form the basis for a coherent policy for
developing this important sector of the European Union's agri-
cultural, industrial and food economy.

1.2
The EESC welcomes the confirmation of the pivotal role
of producer organisations in the Common Market Organisation
of the fruit and vegetable sector.

1.3
The EESC considers financing to be an essential part of a
coherent policy capable of ensuring the competitiveness of the
European fruit and vegetable sector;
it therefore calls on the
Commission to think more carefully about the financial impact
of
is introducing, positive and laudable
though these are.

the innovations it

The EESC believes that

1.4
the introduction of new and
significant measures into the operational programmes will lead
to an objective reduction in resources available for investment
and employment.

The EESC supports the Commission's strategy aimed at
1.5
turning the entire first pillar into a consistent and balanced
whole by 2013; to this end, it calls on the Commission to put
in place an appropriate transition programme for the fruit and
vegetable sector so as to bring all the operators in the sector up
to speed with the new system and, at the same time, to ensure
that European consumers enjoy security of adequate supply in
terms of quality and quantity.

The EESC recommends that

1.7
aimed at protecting consumers be maintained,
those on food hygiene and the origin of produce.

the marketing standards
in particular

2. The Commission's arguments and proposals

2.1

The Commission sets out the following objectives:

— encourage competitiveness and market orientation of EU
fruit and vegetable production: in other words, help to make
production sustainable and competitive both in the internal
market and on foreign markets;

— reduce the fluctuations in producers' incomes due to crises;

— increase the consumption of fruit and vegetables in the EU;

— emphasise the sector's duty to conserve and protect the

environment;

— simplify and, if possible, reduce the administrative burden

for all stakeholders.

The architecture of the reform is based on three key

2.2
pillars:

— budget neutrality;

— bringing the Common Market Organisation (CMO) into line
with the 2003 CAP reform and subsequent regulations;

— consolidation of the structure of the CMO by strengthening

producer organisations (POs).

flexible measures

1.6
The EESC welcomes the Commission's policy aimed at
actively protecting the environment; with this in mind, it recom-
mends
and
that
approaches of the various operators. As regards promoting the
consumption of fruit and vegetables by certain categories of
consumer, it recommends a more definite strategy as part of the
horizontal support policy.

reward the practices

The Commission states

2.2.1
the above-mentioned
objectives have been identified taking into account the need for
WTO (World Trade Organisation) compatibility; consistency
with the reformed CAP, and conformity with the financial
perspectives.

that

2.2.2
The Commission points out that EU-27 fruit and vege-
table production accounts for 3.1 % of the Community budget
and 17 % of total EU agricultural production.

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The resources the proposed reform allocates to fresh
2.2.3
fruit and vegetables remain at 4.1 % of
the
marketed production of the PO, whilst the national maxima for
processed produce are transferred to the Single Farm Payment
(SFP) in accordance with the historical values for each country
and, for the new Member States, in accordance with those set
by the accession treaties.

the value of

— changing the list of products for which a PO may be

established;

— conferring on POs the responsibility for crisis management
not exceeding one-third of the expenditure under the opera-
tional programme;

2.2.4
In regions where the degree of organisation of produ-
cers is particularly low, additional national financial assistance
may be authorised.

2.2.5
The co-financing rate of operational programmes is
maintained at 50 %, except for some particular cases, where it
may rise to 60 % (transnational actions, schemes operated on
an interbranch basis, organic production, producers in new
Member States, mergers of POs, outermost regions, regions
where less than 20 % of production is organised).

— providing for levels of direct sales fixed by Member States,

the minimum level being 10 %.

The proposal

interbranch organisations
recognises
2.2.13
and provides for the rules for members of POs to be extended
to producers who are not members of POs if the latter cover at
least 60 % of the production of the area in question.

2.2.14
The Commission proposes that Member States esta-
blish a national strategy to enable POs to assess the effectiveness
of the operational programmes.

2.2.6 Withdrawals of up to 5 % of production, for distribu-
tion to charitable organisations and foundations, penal institu-
tions, schools, children's holiday camps, hospitals and old
people's homes, may be 100 % financed by the Commission.

2.2.15
Obligatory promotion actions targeted towards young
people under 18 are proposed within each operational
programme.

Provision is made for abrogating Article 51 of Regu-
2.2.7
lation 1782/2003 and thus for the eligibility of fruit and vegeta-
bles for the SFP.

3. General comments

2.2.8 Member States are to establish reference amounts and
eligible hectares under the single payment scheme (SPS) on the
basis of a representative period appropriate to the market of
each fruit and vegetable product and of appropriate objective
and non-discriminatory criteria.

2.2.9
The Commission provides that at least 20 % of the
total expenditure of each operational programme must be dedi-
cated to agro-environmental measures.

The proposal does not affect the existing rules on
2.2.10
external trade; however, it does propose the abolition of export
refunds.

2.2.11
Part of the regulation of the fruit and vegetable sector
provided for in the proposal was previously included in the
proposed regulation on a
single CMO (currently being
considered by the Council).

2.2.12
In its proposed reform, the Commission also provides
for a subsequent review of marketing standards, relating in par-
ticular to quality, grading, weight, sizing, packaging, wrapping,
storage, transport, presentation, marketing and labelling. The
Commission proposal confirms the key role of producer organi-
sations in the fresh fruit and vegetable sector by:

3.1
The EESC believes that the aims of the reform, if they are
pursued as a whole, can form the basis for a coherent policy for
developing this important sector of the European Union's agri-
cultural, industrial and food economy. Indeed, the Commission
itself, in its ‘reasons for reform’, states that ‘of the 9.7 million
agricultural holdings
in the European Union (EU) of 25,
1.4 million produce fruit and vegetables. The sector farms 3 %
of the cultivated area and produces 17 % of the value of EU's
[sic] agricultural production. The sector is faced with pressure
from the highly concentrated retail chains and with increased
[…] The sector
competition from third country products.
receives about 3.1 % of
[sic]
budget.’ (1) For its part, the EESC points out that the fruit and
vegetable sector provides the highest level of employment in
proportion to surface area used. Moreover, the fruit and vege-
table sector faces an internationally competitive environment
(WTO negotiations, Euromed free trade area in 2010), which
will have an increasing impact on the development of European
fruit and vegetable production.

the Common Agriculture's

In addition,

the European Court of Auditors,

3.2
in its
special report 8/2006 entitled Growing success? The effectiveness of
the European Union support for fruit and vegetable producers' opera-
tional programmes, whilst taking a critical look at the operation
of producer organisations and also finding a ‘significant advance
on the initial situation’, called for better monitoring of the effec-
tiveness of aid, and asked for ‘better target[ing of] the policy’ so
as to strengthen POs.

(1) Commission Staff Working Document SEC(2007) 75 — Towards a
reform of the fresh and processed fruit and vegetables common market
organisations. Impact analysis summary.

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3.3
The EESC points out the discrepancy between the stated
objectives and the financial resources — a key component of a
coherent policy — made available for the realisation of those
objectives; this confirms an imbalance in the CAP as regards
production in the Mediterranean.

made available for this purpose can be used by all producers, so
that any intervention in the event of a crisis will be effective and
enable the markets in question to recover.

The EESC notes that the Commission has made its proposals
within the constraints of a budget that has not been increased.
It also notes that by abolishing market withdrawals and export
refunds, the Commission is bringing about an increase in the
resources
operational
programmes, but that these resources risk being left unused and
will not be available for investment by more efficient POs.

potentially

available

future

for

The EESC further notes that the proposal a) introduces
3.4
new, politically and economically highly significant measures
(management of market crises, environment policy, promoting
consumption)
into operational programmes and b) raises (to
60 %) the co-financing of certain measures that are considered
strategic.

This innovative policy, combined with the maintenance of the
upper limit to Community aid for operational programmes of
4.1 % of the value of the production marketed by each PO,
results, de facto, in a reduction in the resources available for
investment.

3.5
The Committee also notes that the introduction of total
decoupling of support for processed products could very likely
lead to a reduction in the value of marketed production and,
resources
consequently, a reduction of aggregate financial
compared to the current situation.

For all these reasons, the EESC believes it necessary to
3.6
introduce at least three corrections, whilst keeping to the prin-
ciple of genuine budget neutrality:

— leaving the management of market crises out of
accounts relating to the PO's operational programme;

the

— derogating from the 4.1 % limit when actions are co-
that are
financed at 60 %,
already consolidated to continue fulfilling their role as a
counterweight to ‘the buying power of
the Large Multi-
ples’ (2);

inter alia to allow POs

— including joint measures by two or more producer
organisations among those which receive 60 % Community
co-financing,
cooperation between
to promote
producer organisations and group supply.

so as

3.7
However, the EESC notes the Commission proposal to
entrust crisis management to POs and calls on the Commission
to put in place transparent criteria for crisis management to
support non-member producers and ensure that the instruments

(2) OJ C 255, 14.10.2005, p. 44 — Opinion CESE 381/2005 — The Large

retail sector — trends and impacts on farmers and consumers.

3.8
The EESC is aware that the Commission has repeatedly
stated its long-term strategy aimed at bringing all the CMOs
into the SFP scheme by 2013. The Committee believes that it
would be possible,
inter alia in keeping with the reforms
approved to date, to have an adequate transition period, taking
into account the specifics of each Member State and of the
various products. The EESC is well aware of the consequences
of a hasty approach, which would be disruptive to employment
and to the processing industry, which needs to embark upon a
complex restructuring strategy — possibly including plant
closures — for which the proposed reform does not provide for
any specific support measures.

3.9
The Committee also notes that the Commission, in order
to comply with the WTO, considers it necessary to replace
Article 51 of Regulation 1782/2003. This will bring about addi-
tional competition within the sector between established fruit
and vegetable producers and potential new producers. In order
to avoid artificial distortions of the profitability of the sector,
the EESC considers it essential to allow — for a transitional
period — Member States to keep Article 51 in force selectively
for certain sensitive products, or to provide for new rights for
those fruit and vegetable producers whose past production did
not generate any.

3.10
The EESC notes that the Commission, in the context of
trade with third countries, proposes the abolition of export
refunds for the sector, and points out that this is another aspect
of EU policy that
takes a generally piecemeal, not entirely
consistent approach to the various sectors of agriculture. It also
calls on the Commission to avoid making any commercial
concessions that would weaken the principle of Community
preference, and to ensure that tariff quotas are administered
rigorously and maintain the special safeguard clause, not least
because the EU is the world's biggest importer of fruit and vege-
its imports come from countries that
tables, over 70 % of
benefit
trade agreements, and the sector
from preferential
includes so-called sensitive products.

it

supports

The EESC, whilst

the aim of moving
3.11
towards simplification, believes that maintaining marketing stan-
dards is vital, both for the protection they afford to consumers
in terms of the safety and origin of the product, and because of
the important role that they play in regulating the market. To
this end, the EESC stresses the importance of the EU successfully
introducing traceability, as a basic measure for managing risks
to public health and plant protection,
into the standards
governing international trade.

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3.12
The EESC also highlights the need for the European
Union to promote, at international level, the introduction and
recognition of environmental and social standards with respect
to workers employed in the production process.

3.13
The EESC welcomes the Commission's policy aimed at
actively protecting the environment. In this regard, the EESC
believes that, rather than setting limits and fixed percentages, it
would be more effective to use an incremental co-financing
starting from a mandatory minimum, aimed at
method,
rewarding operational programmes oriented towards
those
objectives.

As regards promoting the consumption of fruit and
3.14
vegetables by certain categories of consumer, the EESC supports
the emphasis placed on this objective by the Commission. It
therefore calls on the Commission to draw up a specific promo-
tion strategy within the scope of horizontal support policy, but
is doubtful as to the effectiveness of making promotional
measures, which will inevitably be limited in scope, mandatory
within operational programmes.

4. Specific comments

that

The Committee points out

4.1
the Commission's
proposal does not resolve the problem facing producers of red
fruit for processing. The EESC believes it would be useful to
create a system of direct support for producers of red fruit for
processing, as is the case for other fruit and vegetables grown
for processing (e.g. dried fruit).

4.2
The EESC welcomes the inclusion of culinary herbs
among the products for which a PO may be set up and calls
upon the Commission to ascertain whether the list set forth in
its proposal meets the needs of all EU regions.

4.3
Based on comparable past experience in distribution for
charity, the Committee would call the Commission's attention

Brussels, 30 May 2007.

to the need to provide for fast and effective implementing
measures.

The EESC calls on the Commission also to consider
to free
in measures

relating

uses

4.4
including non-food
distribution.

4.5
The EESC calls on the Commission to consider the par-
ticular difficulties faced by producers in the new Member States
in co-financing crisis management.

4.6
The EESC believes that setting a minimum limit of direct
sales by producers is contrary to the aims of the reform, and
suggests that the wording of the previous regulation be kept.

4.7
The EESC is not opposed to the idea of the Member
States framing a national strategy for operational programmes,
inter alia to make best use of existing public bodies; however, it
believes that these national strategies should be voluntary for
lead to the
the Member State concerned and should not
drawing-up of new lists of positive actions at national level.

4.8
In addition, the EESC notes that, in some cases, Com-
munity policy facilitating group supply, including by merging
POs, may prove to be in conflict with Community or national
authorities' measures to safeguard competition. It therefore calls
for the European dimension of the fruit and vegetable market to
be taken into account when implementing competition rules.

The EESC proposes that the Commission set up a Com-
4.9
munity observatory on pricing and marketing practices, with
the aim of improving market transparency for the benefit of all
stakeholders.

Given that the proposed reform establishes an indepen-
4.10
dent Common Market Organisation for the sector, the EESC
calls on the Commission not to include additional standards
relating to the fruit and vegetable sector in the regulation on the
Single CMO.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS