Proposal for a Council Regulation amending Regulation (EC) No 1234/2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation)
Date: 2008-01-29
Institutions: European Commission
Subjects: agro-industry, aid system, common organisation of markets, flax, hemp, production aid, single market

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 29.1.2008 
COM(2008) 27 final 

2008/0011 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1234/2007 establishing a common organisation of 
agricultural markets and on specific provisions for certain agricultural products  
(Single CMO Regulation) 

(presented by the Commission) 

EN 

   EN 

 
 
 
  
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

The CMO for flax and hemp, Council Regulation  (EC)  No 1673/2000, does  not foresee the 
granting of any aid for the production of short flax fibre and hemp fibre as of the marketing 
year 2008/2009. However, in its Article 15(3), it provides for the presentation of a report in 
which the Commission is called upon to assess whether that regime should be prolonged. The 
report is under preparation and will be presented as foreseen before the start of the marketing 
year 2008/2009. However, the Commission considers that any substantive amendments to the 
current  policies  should  only  be  decided  as  part  of  the  health  check.  Therefore,  the 
Commission considers that the current aid scheme should be prolonged for another marketing 
year and final decisions only be taken as of the following marketing year in the framework of 
the policy reviews to be undertaken under the health check. 

Regulation  (EC)  No  1673/2000  will  be  repealed  by  Regulation  (EC)  No  1234/2007  (the 
Single CMO Regulation) with effect from 1 July 2008 which is the start of the marketing year 
2008/2009  for  that  sector.  The  amendments  contained  in  the  attached  proposal  therefore 
concern the Single CMO Regulation. 

•  General context 

The overall assessment of the present organisation of the flax and hemp sector seems positive 
and  points  to  the  conclusion  that  the  current  common  market  organisation  is  working  well. 
The most significant consequence of the introduction of the processing aid for fibres has been 
that  it  has  eliminated  speculative  production.  The  reform  undertaken  in  2000  has  led  to  a 
significant  reduction  in  Community  expenditure  and  stabilisation  of  the  budget  at  about 
EUR 20  million.  In  addition,  the  reform  has  resulted  in  growth  of  the  economically  viable 
outlets  and  generally  safeguarded  or,  in  some  cases,  improved  producers'  income  over  the 
period concerned. 

The  processing  aid  has  supported  EU  production  of  flax  and  hemp  fibres,  materials  which 
have  a  positive  impact  on  environment  (preservation  of  biodiversity).  Moreover,  the  CMO 
processing aid has helped to preserve  and  create jobs  in traditionally producing  regions  and 
other areas and to support investments in R&D to improve processing methods and develop 
new products containing vegetable fibres. 

Among the new Member States which acceded to the European Union since 2004, seven of 
them are producers of flax fibres and four producers of hemp fibres. The flax production tends 
to decrease in the new Member States while the production of hemp is growing. 

•  Existing provisions in the area of the proposal 

Council Regulation (EC) No 1673/2000 has been replaced by Regulation (EC) No 1234/2007 
establishing a single common organisation of agricultural markets ("Single CMO"). 

•  Consistency with the other policies and objectives of the Union 

Not applicable. 

EN 

2 

   EN 

 
2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

The  proposal  was  consulted  with  the  stakeholders  of  the  sector  in  the  framework  of  the 
Advisory  Group  on  Flax  and  Hemp,  the  Management  Committee  for  Natural  Fibres  and 
during the bilateral meeting between the representatives of the flax and hemp sectors with the 
AGRI Cabinet  

•  Collection and use of expertise 

Scientific/expertise domains concerned 

agro-economics and statistics 

Methodology used 

Update  of  a  study  realised  by  independent  experts  (Ernst&Young  and  AND-International) 
finalised in November 2007. 

Main organisations/experts consulted 

See above. 

Means used to make the expert advice publicly available 

The report will be available on: http://ec.europa.eu/agriculture/eval/index_en.htm. 

•  Impact assessment 

Not applicable. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

The  proposal  to  amend  the  Regulation  establishing  "Single  CMO"  means  that  until  the 
2008/2009  marketing  year  the  aid  for  long  flax  fibre  will  remain  at  the  current  level  of 
EUR 160 per tonne and the aid for short flax and hemp fibres would be kept at EUR 90 per 
tonne. As for the national guaranteed quantities, the present levels would continue to apply. 

As  regards  the  maximum  content  of  impurities  and  shives,  considering  that  most  Member 
States make use of the derogation from the 7.5% limit and that certain end-uses require a high 
level  of  impurities,  the  current  system  should  be  maintained  in  order  to  permit  the  Member 
States to grant aid for short flax fibre containing a maximum of 15% of impurities and shives 
and hemp fibre containing a maximum of 25%. 

The  additional  aid  granted  to  primary  processors  of  long  flax  fibre  in  certain  traditional 
production areas of the Netherlands, Belgium and France will remain unchanged, that is aid of 
EUR  120  per  hectare  in  zone  I  and  of  EUR  50  per  hectare  in  zone  II,  as  laid  down  in 
Regulation (EC) No 1673/2000. 

EN 

3 

   EN 

 
•  Legal basis 

Council Regulation (EC) No 1673/2000 and Council Regulation (EC) No 1234/2007 ("Single 
CMO Regulation) 

•  Subsidiarity principle 

The proposal leaves the important elements under the responsibility of the Member States: 

– 

– 

– 

Controls of THC content and the use of authorised varieties of hemp; 

Accountancy control of authorised primary processors; 

Controls of stocks. 

•  Proportionality principle 

The proposal complies with the proportionality principle because it corresponds to the general 
objectives of the common agricultural policy. 

•  Choice of instruments 

Proposed instruments: Council Regulation amending Council Regulation (EC) No 1234/2007 
establishing  a  common  organisation  of  agricultural  markets  and  on  specific  provisions  for 
certain agricultural products. 

4. 

BUDGETARY IMPLICATION 

The extra cost of this extension is an estimated EUR 4,64 million. On the basis of estimated 
quantities  the  total  expenditure  with  the  prolongation  of  the  current  aid  would  be 
EUR 20,82 million. 

EN 

4 

   EN 

 
2008/0011 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1234/2007 establishing a common organisation of 
agricultural markets and on specific provisions for certain agricultural products  
(Single CMO Regulation) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Articles 36 and 37 thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament1, 

Whereas: 

(1) 

(2) 

The processing aid for short flax fibre and hemp fibre containing not more than 7,5% 
impurities and shives applies until the end of 2007/2008 marketing year. Nevertheless, 
in view of the favourable trends on the market for this kind of fibre under the current 
aid  scheme  and  in  order  to  contribute  to  consolidating  innovative  products  and  their 
market  outlets,  application  of  this  aid  should  be  extended  until  the  end  of  the 
2008/2009 marketing year.  

Council Regulation (EC) No 1673/2000 of 27 July 2000 on the common organisation 
of the markets in flax and hemp grown for fibre2 provided for an increase in the level 
of  processing  aid  for  long  flax  fibre  from  the  2008/2009  marketing  year  onwards. 
Regulation  (EC)  No 1673/2000  has  been  replaced  by  Council  Regulation  (EC) 
No 1234/20073 as of the marketing year 2008/2009. The provisions of Regulation (EC) 
No  1234/2007  were  drafted  in  view  of  the  provisions  of  Regulation  (EC) 
No 1673/2000 as they would have applied as of that marketing year, therefore fixing 
the aid at the level foreseen. Since the processing aid for short fibres is maintained till 
the end of the 2008/2009 marketing year, the processing aid for long flax fibre for that 
additional  marketing  year  should  be  maintained  at  the  level  that  has  so  far  been 
foreseen in Regulation (EC) No 1673/2000 until the end of the 2007/2008 marketing 
year.  

(3) 

In order to promote the production of high-quality short flax and hemp fibres, the aid 
is granted to fibres containing a maximum of 7,5% of impurities and shives. However, 
the Member States may derogate from this limit and grant processing aid for short flax 
fibre containing a percentage of impurities and shives of between 7,5% and 15% and 

1 
2 

3 

OJ C ..., …, p. … 
OJ  L 193, 29.7.2000, p. 16. Regulation  as last  amended by  Regulation (EC) No 953/2006 (OJ  L 175, 
29.6.2006, p. 1). 
OJ L 299, 16.11.2007, p. 1. 

EN 

5 

   EN 

 
                                                 
for hemp fibre containing a percentage of impurities and shives of between 7,5% and 
25%. Since this possibility is open only till the end of the 2007/2008 marketing year, it 
is necessary to give the Member States the possibility to derogate from that limit for 
one more marketing year. 

As new market outlets have developed it is required to guarantee a minimum level of 
raw material supply. So in order to continue to ensure reasonable production levels in 
each  Member  State,  it  is  necessary  to  extend  the  period  in  which  the  national 
guaranteed quantities apply.  

Additional aid has been supporting the continuation of traditional production of flax in 
certain regions of the Netherlands, Belgium and France. In order to continue enabling 
gradual adaptation of farm structures to the new market conditions, it is necessary to 
extend this transitional aid until the end of 2008/2009 marketing year 

(4) 

(5) 

(6) 

Regulation (EC) No 1234/2007 should therefore be amended accordingly, 

HAS ADOPTED THIS REGULATION 

Regulation (EC) No 1234/2007 is amended as follows: 

Article 1 

(1) 

The Title of Subsection II of Section I of Chapter IV of Title I of Part II is replaced 
by the following: 

"Subsection II 
Flax and hemp grown for fibre" 

(2) 

Article 91 is amended as follows: 

(a)  The  first  subparagraph  of  paragraph  1  is  replaced  by  the  following 

subparagraphs: 

"Aid  for  processing  the  straw  of  long  flax  grown  for  fibre  shall  be  granted  to 
authorised primary processors on the basis of the quantity of fibre actually obtained 
from straw for which a contract of sale has been concluded with a farmer. 

During  the  marketing  year  2008/2009  aid  shall  also  be  granted  under  the  same 
conditions for processing the straw of short flax and hemp grown for fibre." 

(b)  Paragraph 2 is replaced by the following: 

"2.  For the purposes of this Subsection, "authorised primary processor" shall 
mean  a  natural  or  legal  person  or  a  group  of  natural  or  legal  persons, 
irrespective of its legal status under national law, or that of its members, 
that has been authorised by the competent authority of the Member State 
in  the  territory  of  which  are  located  its  facilities  for  producing  flax  or 
hemp fibre. 

(3) 

Article 92(1) is replaced by the following: 

EN 

6 

   EN 

 
"1.  The amount of processing aid provided for in Article 91 shall be fixed: 

(a) 

for long flax fibre: 

– 

– 

at EUR 160 per tonne for the 2008/2009 marketing year; 

at EUR 200 per tonne from the 2009/2010 marketing year onwards; 

(b)  during  the  marketing  year  2008/2009,  for  short  flax  and  hemp  fibre 
containing  not  more  than  7,5%  impurities  and  shives,  at  EUR  90  per 
tonne. 

However,  the  Member  State  may,  with  reference  to  traditional  outlets,  also 
decide to grant aid: 

(a) 

(b) 

for  short  flax  fibre  containing  a  percentage  of  impurities  and  shives  of 
between 7,5% and 15%; 

for  hemp  fibre  containing  a  percentage  of  impurities  and  shives  of 
between 7,5% and 25%. 

In the cases provided for in the second subparagraph, the Member State shall 
grant  the  aid  in  respect  of  a  quantity  which  amounts  to  not  more  than  the 
quantity produced, on the basis of 7,5% of impurities and shives." 

(4) 

Article 94 is amended as follows: 

(a)  Paragraph 1 is replaced by the following: 

"1.  A  maximum  guaranteed  quantity  of  80  878  tonnes  per  marketing  year 
shall  be  established  for  long  flax  fibre  in  respect  of  which  aid  may  be 
granted. That quantity shall be apportioned among certain Member States 
as  national  guaranteed  quantities  in  accordance  with  point  A.I.  of 
Annex XI. 

(b)  The following paragraph is inserted after paragraph 1: 

"1a.  A  maximum  guaranteed  quantity  of  147 265  tonnes  for  the  marketing 
year 2008/2009 shall be established for short flax fibre and hemp fibre in 
respect of which aid may be granted. That quantity shall be apportioned 
as  national  guaranteed  quantities  among  certain  Member  States  in 
accordance with point A.II. of Annex XI." 

(c)  The following paragraph is added: 

"3.  Each Member State may transfer part of its national guaranteed quantity 
as  referred  to  in  paragraph  1  to  its  national  guaranteed  quantity  as 
referred to in paragraph 1a and vice versa. 

Transfers as referred to in the first subparagraph shall be carried out on 
the basis of an equivalence of one tonne of long flax fibre to 2,2 tonnes 
of short flax fibre and hemp fibre. 

EN 

7 

   EN 

 
 
Processing aid shall be granted only in respect of the quantities referred 
to in paragraphs 1 and 1a, respectively, adjusted in accordance with the 
first two subparagraphs of this paragraph." 

(5) 

The following Article is inserted after Article 94: 

"Article 94a 
Additional aid 

During  the  2008/2009  marketing  year,  additional  aid  shall  be  granted  to  the 
authorised  primary  processor  in  respect  of  areas  under  flax  in  zones  I  and  II  as 
described in point A.III. of Annex XI and the straw production of which has been the 
subject of: 

(a) 

a sale/purchase contract or a commitment as referred to in Article 91(1) and 

(b) 

aid for processing into long fibre. 

The amount of additional aid shall be EUR 120 per hectare in zone I and EUR 50 per 
hectare in zone II." 

(6) 

Annex XI is amended in accordance with the Annex to this Regulation. 

Article 2 

This Regulation shall enter into force on the seventh day following that of its publication in 
the Official Journal of the European Union. 

It shall apply from 1 July 2008. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the Council 
The President 

EN 

8 

   EN 

 
 
 
 
Point A of Annex XI is replaced by the following: 

ANNEX 

"A.I.  Apportionment of the maximum guaranteed quantity for long flax fibre among 

the Member States referred to in Article 94(1): 

Belgium 

Bulgaria  

Czech Republic 

Germany 

Estonia  

Spain 

France 

Latvia 

Lithuania 

Netherlands 

Austria 

Poland 

Portugal 

Romania 

Slovakia 

Finland 

Sweden 

United Kingdom 

13 800 

13 

1 923 

300 

30 

50 

55 800 

360 

2263 

4800 

150 

924 

50 

42 

73 

200 

50 

50 

A.II.  Apportionment  of  the  maximum  guaranteed  quantity  for  the  marketing  year 
2008/2009 for short flax and hemp fibre among the Member States referred to 
in Article 94(1a) 

The quantity referred to in Article 94(1a) shall be apportioned in the form of: 

(a) 

national guaranteed quantities for the following Member States: 

Belgium 

Bulgaria  

Czech Republic 

Germany 

Estonia  

Spain 

France 

Latvia 

Lithuania 

10 350 

48 

2 866 

12 800 

42 

20 000 

61 350 

1 313 

3 463 

EN 

9 

   EN 

 
Hungary* 

Netherlands 

Austria 

Poland 

Portugal 

Romania 

Slovakia 

Finland 

Sweden 

United Kingdom 

2 061 

5 550 

2 500 

462 

1 750 

921 

189 

2 250 

2 250 

12 100 

* 

The national guaranteed quantity fixed for Hungary concerns hemp fibre only. 

(b) 

5 000  tonnes  to  be  apportioned  in  national  guaranteed  quantities  for  the  marketing 
year  2008/2009  among  Denmark,  Ireland,  Greece,  Italy  and  Luxembourg.  Such 
apportionment shall be determined on the basis of the areas which were the subject 
of one of the contracts or commitments as referred to in Article 91(1)." 

A.III.  Zones eligible for the aid referred to in Article 94a 

Zone I 

1. 

2. 

Zone II 

1. 

2. 

The territory of the Netherlands, 

The  following  Belgian  communes:  Assenede,  Beveren-Waas,  Blankenberge, 
Bredene,  Brugge,  Damme,  De  Haan,  De  Panne,  Diksmuide  (except  Vladslo  and 
Woumen),  Gistel,  Jabbeke,  Knokke-Heist,  Koksijde,  Lo-Reninge,  Middelkerke, 
Nieuwport, Oostende, Oudenburg, Sint-Gillis-Waas (Meerdonk only), Sint-Laureins, 
Veurne and Zuienkerke. 

Areas of Belgium other than those included in Zone I. 

The following areas of France: 

– 

– 

– 

– 

the department of Nord, 

the districts of Béthune, Lens, Calais, Saint-Omer and the canton of Marquise 
in the department of Pas-de-Calais, 

the districts of Saint-Quentin and Vervins in the department of Aisne, 

the district of Charleville-Mézières in the department of Ardennes. 

EN 

10 

   EN 

 
1. 

2. 

3. 

4. 

5. 

5.0 

FINANCIAL STATEMENT 

BUDGET HEADING: 
05 02 07 01 
TITLE: 
Council  Regulation  amending  Regulation  (EC)  No  1234/2007  establishing  a  common  organisation  of 
agricultural markets and on specific provisions for certain agricultural products 
LEGAL BASIS: 
Article 37 of the Treaty 
AIMS: 
To prolong the existing system for a period of one year for flax and hemp. 
FINANCIAL IMPLICATIONS 

APPROPRIATIONS: 
EUR 21 million 

12 MONTH 
PERIOD 

CURRENT 
FINANCIAL 
YEAR 
2008 
(EUR million) 
0 

FOLLOWING 
FINANCIAL 
YEAR 
2009 
(EUR million) 
2,44 

CHARGED TO THE EC BUDGET 

EXPENDITURE 
– 
(REFUNDS / INTERVENTIONS) 
– 
– 

NATIONAL AUTHORITIES 
OTHER 

(EUR million) 
4,64 

5.1  REVENUE 

– 

– 

– 

OWN RESOURCES OF THE EC  

– 
(LEVIES / CUSTOMS DUTIES) 
– 

NATIONAL 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 
5.2  METHOD OF CALCULATION: 

Estimates : 

2010 
2,20 Mio € 

Old aid *

New aid **

QMG 
long/t
80 878 X

Aid

200

Mio €

=

16.18

Estimates 
quantities
102 690 X

Aid

160

Total

0
0
16.18

27 587

x

90

Total

Financial 
implication

Mio €

4.64

=

=

Mio €

16.43

2.48
1.91
20.82

Long flax fibre
Short flax:

fibre/hemp
supplem. aid

*

**

The QMG for long fibres was always reached. Without prolongation of the current aid,
starting from marketing year 2008/2009, the payment would be 200 € per ton of long fibres.
Prolongation of current aid.

6.0  CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 

RELEVANT CHAPTER OF THE CURRENT BUDGET? 

6.1  CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF 

THE CURRENT BUDGET? 

6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 
6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 

YES NO 

YES NO 
YES NO 
YES NO 

OBSERVATIONS: 
The estimated quantities are the average production of marketing years 2004/05 (real quantities) and 2005/06, 
2006/07 (communicated estimates). (Compatible with AL 2008) 
In  case  the  full  national  guaranteed  quantities  would  be  used,  the  maximum  financial  impact  would  be 
EUR 12,02 million. 

EN 

11 

   EN