Commission staff working document accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of Regions on agricultural product quality policy - Impact Assessment Summary {COM(2009) 234} {SEC(2009) 670}
Date: 2009-05-28
Institutions: European Commission
Subjects: agricultural product, foodstuff, product quality, production improvement, report

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 28.5.2009 
SEC(2009) 671 

COMMISSION STAFF WORKING DOCUMENT 

accompanying the 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF REGIONS 

on agricultural product quality policy 

Impact Assessment Summary 

{COM(2009) 234} 
{SEC(2009) 670} 

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COMMISSION STAFF WORKING DOCUMENT 

Impact Assessment Summary 

Agricultural Product Quality Policy 

1.  POLICY CONTEXT AND PROBLEM DEFINITION 

Agricultural  product  quality  policy  addresses  the  market  failure  caused  by  asymmetric 
information  between  farmers  and  buyers  on  quality  aspects  of  agricultural  products.  It  is 
focussed on the contribution made by farmers and producers of primary agricultural and 'first-
stage' processed product (wine, cheese, olive oil, meat,…). 

The  EC  has  developed  a  variety  of  instruments  concerning  the  marketing  of  agricultural 
products that guarantee product characteristics and farming attributes: 

–  marketing  standards  and  product  directives,  laying  down  agricultural  product  identity 
(e.g.  definitions  of  ‘drinking  milk’,  ‘fruit  juice,  ‘wine’),  classification  of  products  (class, 
size …),  origin and  place-of-farming  labelling,  and  defining  certain  ‘reserved  terms’  that 
indicate value-adding characteristics and attributes, such as farming method. 

–  EU agricultural product quality schemes. Six schemes are in operation: for geographical 
indications  (three  schemes),  traditional  specialities  guaranteed,  organic  farming,  and 
product of outermost regions. Two further EU schemes are under development: extending 
the Ecolabel to foodstuffs, and an animal welfare labelling scheme. 

In addition, numerous private and national (and regional) certification schemes have been 
developed.  These  include  food  assurance  certification  schemes  (guaranteeing  ‘baseline’ 
standards have been met), and food quality certification schemes that ‘differentiate’ product 
on the market by highlighting value-adding product characteristics and farming attributes to 
buyers and consumers. 

These  instruments  (EU  measures,  private  and  national),  seek  to  address  the  fundamental 
market  problem which derives  from  asymmetric information that would otherwise impede 
the  sale  and  purchase  of  product  at  a  fair  price  having  regard  to  its  characteristics  and 
attributes.  In  addition,  there  are  difficulties  and  problems  in  the  operation  of  each  of  these 
measures. Globally, EU policy has developed ad hoc and a number of inconsistencies have 
emerged  or  are  threatened;  furthermore,  a  variety  of  initiatives,  particularly  in  the 
environmental  sector,  are  in  train  and  risk  further  inconsistencies.  The  diversity  of  these 
initiatives  contributes  to  the  coherence  problem  and  there  is  a  danger  of  an  uncoordinated 
approach  to  agricultural  product  quality  policy  measures,  resulting  in  confusion  for 
stakeholders  and  consumers  and  policy  inconsistencies.  Specifically,  EU  schemes  are 
excessively  complex;  the  geographical  indications  measure  has  not  achieved  sufficient 
visibility  and  a  number  of  essentially  technical  matters  have  been  identified;  the  traditional 
specialities  measure  has  not  filled  its  promise,  and  marketing  standards  are  complex  and 
overly-prescriptive.  In  the  private  and  national  sectors,  the  explosion  in  the  number  and 
diversity  of  certification  schemes  has  led  to  consumer  confusion  and  questions  about  the 
proper  functioning  of  the  single  market.  Finally,  the  ad  hoc  approach  to  place-of-farming 

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labelling has left a fragmented picture where the place must be labelled on beef, but not on 
pork; and on honey, but not on dairy products. 

2.  OBJECTIVES 

The  general  objective  of  agricultural  product  quality  policy  is  to  enable  farmers  and 
producers  to  meet  consumer  expectations  for  product  characteristics  and  farming  attributes 
and communicate them effectively, ensuring:  

–  farmers and producers get a fair return reflecting the agricultural product quality; 

–  farmers  and  producers  can  react  to  consumer  demand  for  value-added  product 

characteristics and farming attributes; 

–  consumers  can  rely  on  labelling  terms  to  identify  agricultural  product  characteristics  and 

farming attributes. 

The specific objectives are: 

–  to  improve  communication  between  farmers  and  buyers  and  consumers  arising  from 

asymmetric information about the qualities of agricultural product; 

–  to increase coherence of EU agricultural product quality policy instruments;  

–  to reduce complexities for farmers and producers, and consumers. 

In addressing these objectives, four policy issues were examined:  

–  Policy issue 1: Marketing standards, including place of farming labelling 

–  Policy issue 2: Geographical indications 

–  Policy issue 3: Traditional specialities 

–  Policy issue 4: Private, national and new EU certification schemes  

3.  POLICY OPTIONS 

3.1. 

Policy issue 1: Marketing standards, including place of farming labelling 

Two options were discarded after technical screening: 

–  introduction of an EU logo indicating compliance with EU requirements would present 

considerable technical obstacles and was opposed by almost all stakeholders. 

–  No  EU  action:  abolition  of  marketing  standards  from  Community  legislation  would 
leave "the field unoccupied", at the risk that divergent, national marketing standards may 
be introduced. All stakeholders supported continuation of (simplified) marketing standards. 

Five options were retained for further analysis: 

–  Option  1.1.  Status  quo  plus:  simplification,  including  harmonisation  of  standards, 
harmonisation  of  common  elements  across  different  sectors,  removal  of  obsolete 
provisions and drafting in line with the latest legal drafting principles. 

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–  Option 1.2. 

Replacement of specific EU marketing standards by a general base 
standard.  This  option  foresees  complete  removal  of  specific  marketing  standards  from 
Community legislation, accompanied by a new general standard, applicable to all products.  

–  Option  1.3.  Combined  approach.  This  option  comprises  essential  requirements  or  base 
standard in legislation (as in Option 1.2) and  technical specifications in standards  agreed 
by stakeholders using a standards setting body (the CEN framework). 

–  Option 1.4. 

Develop use of reserved terms. Lay down clear definitions, identities, 
classes, sizes, which have to be respected if used at the stage of placing on the market and 
are voluntary for producer/operators (e.g. ‘farmhouse’, ‘free range’, and particularly if the 
'traditional specialities' scheme instrument is discontinued, the term 'traditional').  

–  Option  1.5.  Extending  existing  compulsory  indication  of  place-of-farming  (EU/non-
EU or country) to cover agricultural product. Labelling of EU/non-EU and/or Member 
State/Third country to be considered especially in light of WTO considerations. 

3.2. 

Policy issue 2: Geographical indications 

Four options were discarded after technical screening, namely: 

–  Action  through  a  general  Directive,  delegating  to  Member  States  the  task  of  identifying 
and  protecting  geographical  indications  is  not  consistent  with  the  policy  objective  of 
having a harmonised application throughout the single market. 

–  Options  Co-regulation  and  self-regulation  which  need  the  involvement  of  non-
governmental organisations, social and economic partners were discarded due to the highly 
fragmented structure of the sector.  

–  No action at Community level (abolition of current legislation) is likely to lead to the 
creation  of  27  different  systems  in  the  Member  States,  with  increased  burden  for 
producers, confusion to consumers and risk of misuse, usurpation, etc. outside the country 
granting the protection.  

–  Application of international rules through the Lisbon Agreement would be impossible 
to  apply  in  the  short  term,  as  an  international  negotiation  to  adhere  to  WIPO  would  be 
needed  as  well  as  some  amendments  on  definitions.  In  the  longer-term,  however,  this 
option should not be ruled out. 

Three options (including three sub-options) were retained for further analysis: 

–  Option  2.1.  Status  quo  plus:  Simplification  of  PDO/PGI  schemes  and  streamlining 
existing procedures. The legal text could be clarified without changing the current legal 
architecture, thereby reducing the time taken to process applications at EU level.  

–  Sub-option  2.1.1  Merging  PDO  and  PGI  definitions.  In  effect,  the  protected 
designation of origin would be abolished and existing registrations would become 
protected geographical indications. This option would reverse the recent policy of 
enhancing the difference between the two types. 

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–  Sub-option 2.1.2 Creation of a single instrument for registering wines, spirits, 
and agricultural product and foodstuffs would enable a more coherent policy, for 
example by using similar criteria and procedures for registrations.  

–  Sub-option  2.1.3  Allowing  national  system  of  protection  of  indications  in 
parallel to the EU scheme. Protection of those names would then only apply to the 
national market. In parallel, trade (volume and value) criteria could be used as a 
precondition for registration of names in the EU registers.  

–  Option 2.2. Abolish the current sui generis PDO/PGI system at EU level and replace 
it by the existing trademark system. The level of protection of geographical indications 
would  be  the  one  ensured  by  TRIPS,  but  the  legal  means  to  protect  names  would  only 
apply through the Community trademark system.  

–  Option  2.3.  Clarifying  PDO/PGI  rules.  The  system  in  place  could  be  clarified  and 

through modification of the regulations and by guidelines. 

3.3. 

Policy issue 3: Traditional specialities guaranteed  

Four options (including two sub-options) were screened and retained for further analysis: 

–  Option 3.1: Status Quo — continuation of current scheme, is not considered viable, but 

is retained as a point of comparison to the other options.  

–  Option  3.2:  Simplification  of  the  scheme,  by  limiting  it  to  one  of  the  two  currently 
existing  options:  either  protection  with  reservation  of  the  name  or  protection  without 
reservation of the name.  

–  Sub-option  3.2.1.  Registration  without  reservation  of  the  name.  This  sub-
option  would  entail  abolition  of  protection  of  the  name.  Use  of  the  registered 
name  would  not  be  limited  unless  it  appears  in  combination  with  the  words 
"Traditional Speciality Guaranteed" or the Community symbol.  

–  Sub-option 3.2.2. TSG registration with reservation of the name. In this case, 
the name itself would be protected and could be used only for products made in 
accordance with the specification.  

–  Option  3.3:  Protecting  the  term  'traditional'  as  a  reserved  term  under  marketing 

standards. This is included under Option 1.4 above. 

–  Option  3.4:  No  EU  action:  discontinuation  of  current  scheme.  Regulating  traditional 

specialities would be left to the private sector, Member States and regions.  

3.4. 

Policy issue 4: Private, national and new EU certification schemes 

One option was discarded after technical screening, namely: 

–  a  legislative  option,  laying  down  rules  or  a  framework  for  the  operation  of  food  quality 
certification schemes. This option lacks efficiency, effectiveness and coherence with other 
EU policy objectives (e.g., simplification) as well as stakeholder acceptance. 

Five options were retained for further analysis: 

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–  Option  4.1:  no  EU  action  =  status  quo  (plus  further  research).  This  option  is  a 
continuation of the present situation, the EU being not directly involved in the operation of 
private  and  national/regional  certification  schemes.  This  option  would  include  further 
research to gain a better understanding of the nature and extent of the problem. 

–  Option  4.2:  Develop  voluntary  guidelines  for  the  operation  of  certification  schemes, 
which  would  highlight  best-practice  approaches  according  to  criteria  agreed  with 
stakeholders. 

–  Option  4.3:  Developing  new  EU  quality  schemes  for  specific  policy  areas.  The 
Commission has already developed or is preparing certification schemes in several policy 
areas. Each new scheme will have to be assessed on its own merit. 

–  Option 4.4: Establish common criteria for new EU schemes. As an alternative to Option 
4.3, and given the number of new schemes and proposals coming forward, criteria could be 
established  to  assess  the  need  for  new  EU  certification  schemes  for  agricultural  products 
and foodstuffs. 

–  Option 4.5: Development of protected reserved terms corresponding to specifications. 
In  cases  where  direct  EU  action  is  justified,  a  lighter  option  administratively  could  be  to 
develop reserved term protection. This is considered under marketing standards (Option 
1.4). 

4.  ANALYSIS OF IMPACTS 

Options  for  each  policy  issue  were  analysed  with  regard  to  effectiveness,  efficiency  and 
consistency as well as in relation to the policy objectives. 

For  policy  issue  1  (marketing  standards,  including  place  of  farming  labelling),  the 
preferred options are option 1.4 (development of use of reserved terms); option 1.3 (combined 
approach),  subject  to  future  investigation;  and,  especially  for  basic  agricultural  products, 
option 1.5 (develop obligatory place of farming labelling). 

For  policy  issue  no.  2  (geographical  indications),  option  2.3  (clarification  of  PDO/PGI 
rules),  and  option  2.1.2  (merging  of  wine,  spirits  and  agricultural  products  systems)  present 
high  effectiveness  and  consistency.  Further  analysis  is  needed  to  address  the  efficiency  of 
option 2.3 (clarifying PDO/PGI rules). 

For  policy  issue  no.  3  (Traditional  specialities),  the  preferred  option  is  3.3  (protecting  the 
term  "traditional"  as  a  reserved  term  under  marketing  standards),  followed  by  option  3.2 
(simplification of the scheme). 

For  policy  issue  4  (private,  national  and  new  EU  schemes),  the  preferred  options  are  4.2 
(guidelines)  and  4.4  (criteria  for  new  schemes),  which  are  combinable.  Option  4.5  (develop 
use of reserved terms), which scored very high in all criteria, is dealt with under policy issue 1 
( marketing standards). 

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5.  OVERALL POLICY COHERENCE AND SYNERGIES BETWEEN PREFERRED OPTIONS 

The table below (preferred options) shows how the preferred options contribute to the overall 
policy  approach,  the  synergies  created  between  different  instruments,  and  legal  and 
procedural clarifications identified. 

Policy 

Preferred options 

towards private and national 
certification and schemes  

Option 4.2: guidelines for operation of certification 
schemes 

to ensure coherence in 
development of new EU schemes 

Option 4.4: criteria for new EU schemes 

coherent development of EU 
marketing standards 

greater use of 'reserved terms' 
(from marketing standards)  

Option 1.3: combined approach (replacing 
marketing standards by a general standard and 
developing detailed rules in a CEN) 

Option 1.4: Develop reserved terms for horizontal 
quality labels (such as 'low carbon') 

Option 3.3: Protect 'traditional' as a reserved term 
(as replacement for traditional specialities scheme) 

common use of certification 
systems for similar schemes 

coherent implementation of 
obligatory place-of-farming 
labelling 

Table: Preferred options 

Option 2.1.1: streamlining procedures for 
geographical indications scheme and merging wine, 
spirits and agricultural products and foodstuff 
registers into one system 

Option 2.3 : Clarification of PDO-PGI rules 

Option 1.5: place of farming labelling on sector-by-
sector approach 

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The  preferred  options  are  combinable  and  represent  together  a  complete  package  for  the 
development of agricultural product quality policy. 

Increased  use  of  'reserved  terms',  in  particular  as  a  replacement  of  the  traditional  speciality 
scheme,  would  provide  major  synergies.  Also  guidelines  for  private  and  national  schemes, 
which could also be applied to the EU schemes, would have synergies. The criteria for new 
EU  schemes  should  prevent  inconsistencies  with  existsing  EU  schemes  and  marketing 
standards.  Linkages  arise  from  the  proposed  common  certification  system  for  geographical 
indications  and  from  the  proposed  coherent  implementation  of  obligatory  place-of-farming 
labelling across sectors in marketing standard. 

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Options 

Marketing 
standards 

Geographical 
indications 

Traditional 
specialities 

Private, national 
and new EU 
schemes 

Option 1.3: 
combined 
approach  

Option 1.4: 
reserved terms for 
horizontal quality 
labels  

Option 1.5: place 
of farming 
labelling  

Option 2.1.1: 
streamlining 
geographical 
indications scheme 
and merging 

Option 2.3 : 
Clarification of 
PDO-PGI rules 

Option 3.3: 
Protect 
'traditional' as a 
reserved term 

Option 4.2: 
guidelines for 
operation of 
certification 
schemes 

Option 4.4: 
criteria for new 
EU schemes 

Linkage: protect 
"traditional" as 
reserved term in 
marketing 
standards 

Linkage: 
proposals for new 
schemes could 
include reserved 
terms 

X 

X 

X 

Linkage: will 
apply to PGIs if 
raw material 
from different 
place than PGI 

X 

X 

Linkage: use of 
marketing 
standard 
mechanism 

X 

Linkage: 
guidelines also to 
apply to EU 
scheme 

Linkage: 
guidelines also to 
apply to EU 
scheme 

Linkage: will 
avoid inconsistent 
labelling 
initiatives from 
new schemes 

Linkage: will 
minimise 
inconsistency 
with existing 
scheme 

Linkage: will 
minimise 
inconsistency 
with existing 
scheme 

X 

X 

Table: Linkages of the preferred options 

6.  MONITORING AND EVALUATION  

This  impact  assessment  is  in  the  context  of  a  Communication  setting  out  strategic 
orientations.  Thus,  in  the  immediate  future,  the  test  of  progress  will  be  development  and 
adoption of these orientations. 

For  the  progress  of  the  policy  itself,  several  core  progress  indicators  are  proposed 
provisionally and will be developed during preparation of each initiative. 

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