Commission staff working document accompanying the proposal for a Council Regulation amending Regulations (EC) No 1290/2005 on the financing of the common agricultural policy and (EC) No 1234/2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) as regard food distribution to the most deprived persons in the Community - Impact Assessment Summary {COM(2008) 563 final} {SEC(2008) 2436}
Date: 2008-09-17
Institutions: European Commission
Subjects: EU financing arrangements, agricultural product, aid to disadvantaged groups, common agricultural policy, intervention stock

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 17.9.2008 
SEC(2008) 2437 

COMMISSION STAFF WORKING DOCUMENT 

accompanying the 

Proposal for a 

COUNCIL REGULATION 

amending Regulations (EC) No 1290/2005 on the financing of the common agricultural 
policy and (EC) No 1234/2007 establishing a common organisation of agricultural 
markets and on specific provisions for certain agricultural products (Single CMO 
Regulation) as regard food distribution to the most deprived persons in the Community 

Impact Assessment Summary 

{COM(2008) 563 final} 
{SEC(2008) 2436} 

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1. 

INTRODUCTION 

The EU’s “Food Distribution programme for the Most Deprived Persons of the Community” 
(referred  to  here  as  the  MDP)  has  been  in  place  since  December  1987,  when  the  Council 
adopted the rules for releasing public intervention stocks of agricultural products to Member 
States wishing to use them as food aid for the most deprived persons of the Community.  

To ensure continuity of supply, in the mid-1990s the MDP was modified to make it possible 
to  supplement  intervention  stocks  with  market  purchases.  This  was  not  intended  as  a  long-
term  solution  but  one  that  could  be  called  upon  when  there  were  insufficient  supplies  of 
certain  products.  The  basis  of  the  programme  remained  intervention,  “until  the  stocks  have 
been run down to a normal level”.  

Ongoing  reforms  to  the  Common  Agricultural  Policy  (CAP)  have  gradually  returned 
intervention  to  a  safety  net  role.  In  2008  market  purchases  make  up  90%  of  the  food 
distributed.  Intervention  stocks  are  low  and  no  new  build-up  of  surpluses  is  forecast  or 
particularly likely, in view both of the revision of the CAP and the world market situation.  

Consequently,  a  new  basis  for  the  MDP  has  to  be  established.  To  this  end  an  impact 
assessment was carried out, in the course of which Member State representatives and charities 
were consulted and an online questionnaire enabled feedback from a broad public. 

•  How the programme works 

The  MDP  is  funded  by  the  European  Agricultural  Guarantee  Fund  (EAGF).  Its  budget  has 
increased from slightly less than € 100 milli on in 1987 to more than € 305 million in 2008. 
Participation in the programme is voluntary; in 2008 nineteen Member States are taking part. 

Each year, Member States wishing to participate communicate their needs to the Commission, 
in  terms  of  quantities  of  the  products  available  in  intervention  stocks.  Based  on  this  and 
Eurostat  data  on  poverty  the  Commission  defines  a  budget  ceiling  for  each  participating 
Member State and a list of products to be withdrawn from public stocks or purchased on the 
market, using the budget allocated. 

When intervention stocks are supplied, tenders are launched for the conversion, or exchange, 
of these commodities (e.g. wheat) into processed products of the same "family" (e.g. flour or 
pasta). These products are distributed as food aid to the most deprived, either in the form of 
food baskets or as meals in centres run by charities and other competent bodies, designated by 
the Member States. In 2006 over 13 million people in 15 Member States benefited from the 
MDP.  

•  Who the programme helps 

The MDP supports the provision of food to individuals or especially vulnerable families who 
find themselves in difficulties. In 2006, an estimated 43 million people in EU-25 were at risk 
of food poverty. The percentage varied between about 2% in Denmark to 37% in Slovakia. In 
5 out of 10 new Member States the indicator was above 20%.  

Children from poor families are particularly vulnerable; their eating patterns determine future 
health-related problems, including reduced brain development and capacity to learn.  

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The elderly are often reported as suffering from malnutrition; because of poverty or disability, 
inadequate and insufficient nutrition is common.  

Homeless people are clearly at risk, as are asylum seekers and irregular migrant workers, who 
are  generally  not  included  in  official  figures;  their  status  may  impede  them  from  benefiting 
from social services and they make up a large portion of soup kitchen beneficiaries.  

•  The basis for Community action 

Hunger, deprivation, poverty and social exclusion are all European issues that are present in 
every Member State. The MDP addresses these problems directly, in the spirit of the Treaty, 
which states that the Union's aim is to "promote the well-being of its peoples" and "promote 
[...] solidarity among Member States." 

More specifically, the programme contributes to meeting the CAP's objectives of stabilising 
markets and ensuring that supplies reach consumers at reasonable prices. Although the CAP 
has  in  the  past  concentrated  on  supply-side  measures,  its  purpose has  always also been  to 
ensure that demand can be satisfied. 

Social support provided by Member State authorities rarely focuses on access to food. Food 
initiatives that target socially excluded and marginal populations tend to be led by charitable 
organisations and run with the help of volunteers.  

The MDP should be seen as making a contribution that can trigger Member State action, and 
help  charities  and  civil  society  develop  their  own  initiatives  to  ensure  the  right  of  all  EU 
citizens to food. An EU framework can ensure that the programme is conducted according to 
EU  standards  of  good  governance  while  dovetailing  with  existing  Member  States 
programmes.  

2. 

OBJECTIVES 

The MDP's goal is to reduce food insecurity and so help guarantee the right to food in the EU. 
The revision of the programme should aim: 

•  To secure a stable source of food for the targeted population  

•  To enhance public governance 

•  To improve targeting on those in need. 

3. 

POLICY OPTIONS  

Option 1 – Intervention only ("Status quo") 

If market purchases cannot be used on a permanent basis, the MDP will depend on available 
intervention  stocks  as  the  sole  source  of  food  for  distributing  to  the  most  deprived.  These 
would  be  exchanged  for  more  usable  food  products  in  the  same  "family",  under  the 
responsibility  of  the  Member  States.  As  now,  the  food  would  then  be  distributed  by  the 
organisations they choose.  

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To simplify procedures, each MS would have direct access to intervention stocks located on 
its own territory and transport costs would be incorporated in the calls for tender. Available 
stocks  could  be  transferred  between  MS,  subject  to  specific  agreements  between  the  MS 
concerned.  Information  concerning  the  stocks  mobilised  would  be  made  available  by  the 
Commission's electronic information and communication system. 

Option 2 – Intervention stocks complemented by market purchases  

The  programme  would  continue  to  be  based  on  withdrawals  from  intervention  when  stocks 
are available, supplemented by market purchases. If the available stocks are not suitable (e.g. 
their  quality  is  inappropriate  for  human  consumption)  or  their  location  would  entail 
unreasonably high transport costs, Member States would not be obliged to use them for  the 
MDP. 

When  intervention  stocks  are  used  the  procedure  would  be  simplified,  as  for  Option  1. 
Products  eligible  for  purchase  would  no  longer  be  restricted  to  the  present  "families"  of 
products  and  no  preliminary  allocation  by  type  of  product  would  be  necessary.  MS  could 
decide which products to purchase. 

To  improve  transparency,  Member  States  would  have  to  publish  online  information 
concerning the tenders.  

Option 3 - Market purchases only 

The  link  with  intervention  stocks  would  disappear  and  the  programme  based  solely  on  a 
budget  transfer  to  be  used  for  market  purchases.  Member  States  would  decide,  without 
restriction, which products to purchase with the Community funding allocated.  

Like  Option  2,  this  would  offer  greater  flexibility,  allow  a  better  nutritional  balance  than  at 
present and more efficient management of the MDP. Dissemination of information on tenders 
would be emphasised, as for Option 2. 

Option 4 – Termination of the food distribution programme 

As intervention stocks have become less available, the programme has lost at least part of its 
rationale and should be terminated after 2009 or phased out.  

4. 

HORIZONTAL ISSUES 

•  Inclusion in a broader social policy context  

The EU currently coordinates Member State actions to combat poverty and social exclusion, 
through the exchange of good practices and other forms of mutual learning. This aspect could 
be strengthened in a new MDP.  

•  Targeting beneficiaries 

Issues  concern  the  targeting  of  food  aid  on  specific  population(s),  targeting  criteria  and  the 
best level for defining this targeting. 

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•  Reduction of food waste 

In a number of Member States charities already negotiate with supermarkets and other fresh 
food  outlets  to  recuperate  unsold,  but  still-good  produce  and  distribute  it  to  the  needy. 
Member States participating in the MDP could be required to include actions concerning the 
recuperation of unwanted/waste food. 

•  Administrative governance 

To  improve  transparency  and  consistency  with  the  programme's  objectives,  multi-annual 
national  programmes  could  describe  national  priorities,  the  targeted  beneficiaries,  types  of 
products and/or meals to be delivered etc. Detailed procedures would ensure transparency in 
the tendering process. 

•  Budget and financing 

A  multi-annual  framework  could  enable  continuity  and  medium-term  planning  by  Member 
States  and  charities.  The  criteria  used  for  the  budget  breakdown  should  be  reviewed  and 
Member State co-financing considered. 

•  Food vouchers 

The possibility of basing the MDP on a food voucher system was rejected because of the risk 
of  fraud.  Control  procedures  would  be  burdensome,  efficiency  poor  and  transaction  costs 
high.  

5. 

ANALYSIS OF IMPACTS 

It was not considered possible to quantify the macro-economic or environmental impacts of 
the  options.  There  is  judged  to  be  no  international  impact;  imported  products  would  be 
eligible  for  market  purchase.  The  options  were  assessed  primarily  for  their  impact  on 
Member State public policies, on the charities and the programme's beneficiaries. 

As the availability of intervention stocks is likely to be sporadic, the impact of Option 1 is 
only slightly less extreme than that of Option 4: the former leads to the drastic downsizing of 
the programme, the latter to its complete abandonment. 

The  consequence  of  relying  entirely  on  intervention  stocks  (Option  1)  would  be  a  big 
reduction of the food distributed; the MDP could no longer function on its current scale and 
would provide little support for the deprived.  

On the basis of the 2008 budget, if no products are available from intervention stocks, the loss 
to  charities  carrying  out  the  food  distribution  would  amount  to  €305 million.  Charitable 
organisations and social services would either have to cut their programmes or seek additional 
help from private donations and Member State or local authorities.  

The  termination  of  the  programme  (Option  4)  or  its  reliance  only  on  intervention  stocks 
(Option 1) could directly affect more than 13 million people (2006 figures - 15 participating 
MS).  

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In  the  new  Member  States  it  is  likely  that  the  distribution  of  food  aid  to  the  most  deprived 
would practically cease. In the "old" Member States the reduction in the amount of food aid 
distributed  would  be  proportionate  to  the  percentage  of  aid  represented  by  the  EU's 
contribution.  

While in the "old" Member States developed welfare systems would continue to reach low-
income families, this  assistance (which mostly does not include the provision of food)  does 
not  in  general  reach  the  socially-excluded,  who  would  suffer  the  greatest  impact  from  the 
programme's termination. 

Rising  food  and  energy  prices  mean  that  the  impact  would  have  even  more  serious 
consequences  for  the  EU  population  considered  to  be  at  risk  of  food  poverty  –  and  in 
particular the children. 

Options 2 and 3 would both have a similar impact, as both would enable the programme to 
continue.  Both  have  the  advantage  of  offering  flexibility  in  the  type  of  food  that  can  be 
distributed.  The  restriction  now  imposed  that  purchases  must  be  in  the  same  "families"  of 
products  as  the  available  intervention  stocks  would  be  removed,  so  allowing  charities  to 
improve the diversity and nutritional quality of the food they provide.  

The new Member States that take part in the programme see the Community programme as 
essential. It has enabled a much higher level of support to the deprived, in response to a clear 
need  in  those  countries  and  has  helped  increase  the  efficiency  and  professionalism  of  the 
charitable NGOs. 

In addition, the provision of food aid offers a first contact between the charities and deprived 
people. Other support can then be arranged by the charities or through the appropriate social 
services and help lead to the reintegration of excluded people.  

Inclusion in a broader social policy context 

The MDP could make a greater contribution to promoting social inclusion through its choice 
of  objectives,  target  groups  and  products,  the  way  it  is  organised  and  distributes  food,  the 
involvement  of  stakeholders  in  financial  and  other  programme  matters.  However,  as  they 
depend  on  a  largely  voluntary  workforce,  some  NGOs  might  have  difficulties  in  assuming 
new administrative tasks. 

Targeting 

Member States should continue to target the populations they consider can be most effectively 
aided, taking into account the specific situation and needs in their country. 

Food waste 

Various initiatives exist in the EU to recuperate and redistribute this food to the deprived, but 
more  can  be  done,  such  as  logistical  support  and  information  exchange.  The  avoidance  of 
food  waste  has  environmental  implications  and  can  also  be  a  way  of  augmenting  the  food 
budget of charitable organisations. 

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Budgetary impact 

•  EU budget 

Option  1:  the  MDP  would  rely  on  intervention  stocks  alone,  which  would  be  available 
erratically. Based on the availability of intervention stocks for the 2008 programme, spending 
would  range  between  zero  and  €25  million,  a  saving  of  €275-305  million  on  the  current 
budget. 

Option  4:  termination  of  the  MDP  would  save  the  entire  budget,  as  there  are  no 
accompanying measures that entail ongoing expenditure. 

Options 2 and 3 have a similar budgetary impact. While the scope of the MDP has not been 
debated, it is clear that it should remain a programme that makes a partial contribution to the 
food aid needs of Member States. 

Estimated on the basis of the reference population in all  27 Member States, to maintain the 
MDP budget at the same level as in 2003, in real terms, would require a budget increase to 
nearly €500 million in 2008. 

A doubling of the budget would be easily absorbed by the charities, especially in view of high 
food prices. In recent years the budget allocated to the programme has always been lower than 
the requests made by Member States. 

•  Programming 

Multi-annual  planning  would  have  the  advantage  of  providing  Member  States  with  a  mid-
term perspective, securing the supply of food from year to year and offering greater flexibility 
in the MDP's implementation. 

Annual monitoring would allow adjustments to be made when necessary. Unused funds could 
not be carried forward. 

•  Methodology for allocating budget 

The current budget breakdown is based on the needs communicated by Member States and a 
"best estimate" of the number of deprived persons in each. To better reflect cohesion goals, 
new methods for calculating the budget breakdown have been examined, taking into account a 
combination of various indicators. 

•  Co-financing 

Co-financing would give national administrations greater involvement and enable an increase 
in  the  MDP's  scale.  The  co-financing  rate  could  vary  between  cohesion  and  non-cohesion 
Member States. 

Administrative costs and simplification 

The  use  of  intervention  stocks  (Options  1  and  2)  entails  additional  costs  and  administrative 
steps, which mean that part of the value of the allocated budget may be lost, while the market 
purchase of food (Options 2 and 3) can result in economies of scale. 

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Option  2  would  simplify  Member  State  access  to  intervention  stocks,  making  it  no  less 
efficient than Option 3, which allows only for budget transfers. The use of intervention stocks 
has the advantage of reducing the time stocks are held, resulting in lower administrative and 
financing costs. 

Good governance perception 

The reduction or termination of aid would be badly perceived by  both  beneficiaries and the 
public.  Options  2  and  3  would  maintain  the  MDP’s  current  positive  image.  The  use  of 
intervention stocks for the programme (Options 1 and 2) especially if they were to reach high 
levels, would be well received and reflect good governance at EU level. 

6. 

MONITORING, EVALUATION AND REPORTING 

Regularly recorded indicators would permit the ongoing assessment of the MDP’s compliance 
with its objectives and allow the programme to be continuously improved.  

Control  procedures  would  remain  in  the  hands  of  Member  State  administrations.  Regular 
audits would be carried out by the Commission. 

Participating Member States would submit multi-annual programmes setting out the targeted 
population(s),  the  choice  of  organisations  to  carry  out  the  distribution,  products  to  be 
distributed etc. and annual implementation reports. 

7. 

CONCLUSION 

The  EU  Programme  of  Food  Aid  to  the  Most  Deprived  does  not  set  out  to  resolve  all  food 
poverty in the Member States. It aims to enhance and/or trigger Member State action, and to 
help support charities and civil society in developing their own initiatives to ensure the right 
of all EU citizens to food.  

Options  2  and  3  both  meet  the  objectives  assigned  to  a  renewed  MDP.  As  well  as 
administrative  simplification  and  improved  governance,  the  Programme  could  introduce 
innovations as concerns food waste and insertion into the broader social context. 

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