REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL First report on the impact of the POSEI reform of 2006 {SEC (2010) 1093}
Date: 2010-09-24
Institutions: European Commission
Subjects: agricultural product, aid system, aid to agriculture, peripheral region, regional aid, supply

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EUROPEAN COMMISSION 

Brussels, 24.9.2010 
COM(2010) 501 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

First report on the impact of the POSEI reform of 2006 

{SEC (2010) 1093} 

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TABLE OF CONTENTS 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE 
COUNCIL First report on the impact of the POSEI reform of 2006 ......................................... 1 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE 
COUNCIL First report on the impact of the POSEI reform of 2006 ......................................... 3 

1. 

2. 

3. 

4. 

4.1. 

4.2. 

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

History and main elements of the scheme.................................................................... 3 

Legal basis of the report............................................................................................... 5 

Impact of the 2006 reform............................................................................................ 6 

Programming and partnership approach ...................................................................... 6 

Specific Supply Arrangements..................................................................................... 6 

4.2.1.  Guarantee of supply of essential products ................................................................... 6 

4.2.2.  Compensation of additional costs ................................................................................ 6 

4.2.3.  Repercussion of the benefit to the end-user ................................................................. 7 

4.2.4.  Re-dispatching of processed products and trade distortions ........................................ 7 

4.2.5.  Maintenance and development of agricultural activities ............................................. 7 

4.3. 

Support to the Local Production .................................................................................. 7 

4.3.1.  Maintenance and development of the local agricultural production............................ 7 

4.3.2.  Quality production ....................................................................................................... 8 

5. 

6. 

7. 

Financial execution ...................................................................................................... 8 

Audit on the implementation of the POSEI scheme after 2006 ................................... 9 

Relevant trade-related developments after the 2006 reform ........................................ 9 

7.1. 

Economic Partnership Agreements (EPAs) ................................................................. 9 

7.2.  WTO and bilateral trade agreements.......................................................................... 10 

8. 

8.1. 

8.2. 

9. 

Improvement proposals.............................................................................................. 11 

Proposed amendments to EU legislation.................................................................... 11 

Recommendations to the Member States................................................................... 11 

Conclusions ................................................................................................................ 12 

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SEC(2010) 1093 

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REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

First report on the impact of the POSEI reform of 2006 

1. 

INTRODUCTION 

Article  349  of  the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU) 
acknowledges the structural, social and economic situation of the outermost regions 
(ORs).  This  is  compounded  by  their  remoteness,  insularity,  small  size,  difficult 
topography  and  climate,  and  economic  dependence  on  a  few  products,  the 
permanence and combination of which severely restrain their development. 

Presently,  nine  regions  belonging  to  three  Member  States  (MS)  are  listed  under 
Article 349 of the TFEU:  

•  for France: Guadeloupe, French Guyana, Martinique, Reunion, Saint-Barthélemy 

and Saint-Martin;  

•  the Portuguese archipelagos of the Azores and Madeira; and  

•  Spain's Canary Islands. 

Taking  into  account  the  special  characteristics  and  constraints  of  these  regions, 
specific  measures  are  to  be  adopted.  These  aim,  in  particular,  to  lay  down  the 
conditions of application of the Treaties to those regions, including common policies. 

As concerns the Common Agricultural Policy (CAP), the ORs benefit from a specific 
regime to support local production and the supply of essential products: the POSEI 
scheme (Programmes d'Options Spécifiques à l'Eloignement et l'Insularité). 

2. 

HISTORY AND MAIN ELEMENTS OF THE SCHEME 

The  first  reference  to  the  creation  of  specific  programmes  for  the  ORs  was  a 
resolution  of  the  European  Parliament  in  1987  concerning  the  French  DOM1.  This 
indicated  that  "the  serious  situation  which  exists  in  these  territories  justifies,  and 
makes it imperative to pursue, economic and social development in various sectors". 

Specific measures for agriculture in the OR were introduced in 1991 for the French 
DOM  (POSEIDOM)2  and  in  1992  for  the  Canaries  (POSEICAN)3,  the  Azores  and 
Madeira (POSEIMA)4. 

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2 
3 
4 

Resolution of the EP of 11 May 1987 
Council Reg. (EEC) No 3763/91 - OJ L 356, 24.12.1991, p. 1. 
Council Reg. (EEC) No 1601/92 - OJ L 173, 27.6.1992, p. 13. 
Council Reg. (EEC) No 1600/92 - OJ L 173, 27.6.1992, p. 1. 

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For this purpose the main instruments of the POSEI scheme were established: 

(a) 

The Specific Supply Arrangements (SSA), aiming to mitigate the costs for the 
supply of products used as inputs for the everyday consumption or manufacture 
of  certain  essential  foodstuff,  by  providing  for  the  exemption  of  duties  on 
products imported directly from third countries or aid for products originating 
in the rest of the Community within the limits of the local needs; 

(b)  Measures  to  Support  Local  Production  (SLP),  aiming  to  maintain  or  develop 
certain products by supporting the production, processing and/or marketing of 
these products or the structuring of the sectors involved; 

(c) 

Accompanying measures: 

– 

– 

– 

– 

Special provisions adapting the CAP to the specificities of the OR; 

Derogations applicable to structural measures; 

A graphic symbol to develop awareness of products from the OR; 

Veterinary and plant health measures. 

In  2001,  the  POSEI  scheme  was  reformed5.  This  reform  amended  the  SSA  by 
establishing "forecast supply balances" - lists of products benefiting from SSA - and 
changing the way SSA aid was calculated based on "additional costs" related to ORs' 
remoteness, insularity and small size instead of export refunds. They also introduced 
new  SLP  measures  and  modified  existing  ones  and  adapted  the  scheme  to  the  new 
Rural Development Regulation6. 

In 2006, POSEI was reformed again, mainly due to the following elements: 

(1) 

(2) 

(3) 

The publication of Commission Communication COM(2004)3437, adopting a 
strategy for the ORs aimed at a better articulation of EU Funds in favour of 
the ORs and the creation of ad-hoc instruments; 

The  2003  CAP  reform  (Council  Regulation  (EC)  No  1782/20038  on  direct 
support  schemes  for  farmers)  which  marked  a  reorientation  of  the  CAP  and 
opened  the  way  to  reform  the  Common  Market  Organisations  (CMO),  to 
which the POSEI referred. 

The  acknowledgement  of  the  rigidity  in  the  management  of  the  programs 
[COM  (2004)687]  which  did  not  allow  a  rapid  adaptation  of  the  supply 
balances and of the SLP measures to the needs of the territory and hampered 
any participative approach. 

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Council Reg. (EC) No 1452/2001 (POSEIDOM), 1453/2001 (POSEIMA) and 1454/2001 (POSEICAN) 
of 28 June 2001 - OJ L 198, 21.7.2001, p. 11. 
Council Reg. (EC) No 1257/1999 - OJ L 160, 26.6.1999, p. 80. 
Revised and reinforced by Commission Communication COM(2008)642. 
OJ L 270, 21.10.2003, p. 1. 

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The  previous  three  regulations  where  thus  replaced  by  a  single  text:  Council 
Regulation (EC) No 247/20069 laying down specific measures for agriculture in the 
outermost regions of the Union. 

The 2006 reform did not modify the main objectives and instruments of the scheme. 
Its main novelty is the adoption of a programming approach and the transfer to the 
MS of the responsibility to design and modify programs adapted to the local needs, 
to  manage  and  monitor  them.  The  objective  of  this  innovation  was  to  introduce  a 
higher level of flexibility in the management of the SSA and SLP and to simplify the 
procedures for their modification. 

Following its adoption, Council Regulation (EC) No 247/2006 was modified several 
times  to  take  into  account  the  2006  sugar  and  banana  reforms,  the  Health  Check 
(transferring  to  POSEI  the  budget  corresponding  to  direct  support  measures 
previously managed under Council Regulation (EC) No 1782/2003) as well as other 
transfers of direct aids in 2007 and 200810. 

These amendments implied progressive increases of the POSEI allocations as shown 
in the following table (Article 23 of Council Regulation (EC) No 247/2006): 

MS 
FR 
PT 
ES 
TOTAL 

FY 2007 
126,6 
77,9 
127,3 
331,8 

FY 2008 
262,6 
86,98 
268,4 
617,98 

FY 2009 
269,4 
87,08 
268,4 
624,88 

FY 2010 
273,0 
87,18 
268,4 
628,58 

FY 2011 & ff.** 
278,41 
106,21 
268,42 
653,04 

Today, the POSEI programmes are the equivalent  of  the first pillar of the  CAP for 
the OR. 

3. 

LEGAL BASIS OF THE REPORT 

Article 28(3) of Council Regulation (EC) No 247/2006 provides that "Not later than 
31 December 2009, and thereafter every five years, the Commission shall submit a 
general  report  to  the  European  Parliament  and  the  Council  showing  the  impact  of 
the  action  taken  under  this  Regulation,  accompanied  if  applicable  by  appropriate 
proposals". 

As the POSEI reform was implemented later than initially foreseen (between end of 
2006  and  mid-2007),  the  first  report  referred  to  above  is  being  submitted  in  the 
course  of  2010  to  allow  the  gathering  of  more  elements  for  the  evaluation  of  the 
initial impact of this reform. 

In  particular,  the  present  report  takes  into  account  the  financial  execution  of  the 
programmes  until  the  financial  year  2009,  data  on  the  relevant  markets  up  to  2009 
and the study carried out by the consultants Oréade–Brèche for the Commission on 

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OJ L 42, 14.2.2006, p. 1. 
- Council Reg. (EC) No 318/2006 - OJ L 58, 28.2.2006, p. 1 (sugar reform) 
- Council Reg. (EC) No 2013/2006 - OJ L 384, 29.12.2006, p. 13 (banana reform) 
- Comm. Reg. (EC) No 1276/2007 - OJ L 284, 30.10.2007, p. 11 (budgetary ceilings for 2007) 
- Comm. Reg. (EC) No 674/2008 - OJ L 189, 17.7.2008, p. 5 (budgetary ceilings for 2008) 
- Council Reg. (EC) No 73/2009 - OJ L 30, 31.1.2009, p. 16 (Health Check) 

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the  evaluation  of  the  measures  implemented  under  POSEI  since  2001  (hereinafter 
under: 
"the 
http://ec.europa.eu/agriculture/eval/reports/posei/index_fr.htm  

evaluation 

published 

February 

study"), 

2010 

in 

4. 

IMPACT OF THE 2006 REFORM 

4.1. 

Programming and partnership approach 

The  increased  responsibilities  and  competencies  for  the  national  and  regional 
authorities  for  defining  their  programme  and  the  participation  of  stakeholders  in 
designing the measures have been welcomed both by the MS and the operators. 

In  particular,  the  increased  flexibility  towards  the  gradual  adaptation  of  the 
programmes  to  the  actual  local  needs  by  means  of  annual  modifications  is  judged 
very  positively.  In  fact,  in  a  context  of  fragility  due  to  market  and  climatic  risks 
specific to these regions, it allows to adapt rapidly the support measures to the actual 
requirements of each territory. 

The  evaluation  study  shows  that  the  reform  has  improved  the  administrative 
efficiency (the increased budget has induced an effect of economy of scale). 

However,  the  increased  level  of  partnership  has  not  allowed  alleviating  the 
administrative  burden:  the  programming  approach  results  heavy  both  for  the 
national/regional authorities and for the Commission's services. 

4.2. 

Specific Supply Arrangements 

4.2.1.  Guarantee of supply of essential products  

The  evaluation  study  shows  that  the  SSA  covers  well  the  needs  for  the  products 
selected by the MS/OR, for which it has an essential role to: 

(a) 

(b) 

Guarantee regular supplies through the establishment of stocks. 

Create  competition  with  similar  imported  products,  which  has  an 
impact on the stability of prices. 

(c)  Maintain the local production structures by: 

• 

• 

Supporting the profitability of the local livestock breeding. 

Ensuring the viability of the local agro-food industry. 

4.2.2.  Compensation of additional costs  

Each MS has chosen different approaches as concerns the determination of additional 
costs.  The  evaluation  study  concluded  that  the  SSA  allows  compensating  them  for 
the supply of all selected products. 

Due in particular to the volatility of transport costs, the SSA budget, which has been 
limited to fixed annual ceilings, cannot cover the same proportion of additional costs 
every year.  

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4.2.3.  Repercussion of the benefit to the end-user 

The  evaluation  study  revealed  that  only  in  certain  cases  the  advantage  has  been 
properly  transmitted.  In  others  this  is  more  difficult  to  determine.  Generally,  it  is 
difficult  to  check  the  proper  transmission  of  the  SSA  advantage  to  the  end-user, 
particularly with respect to products that have been introduced in a processing chain. 
These  controls  are  competence  of  the  concerned  MS,  which  are  implementing 
monitoring systems.  

4.2.4.  Re-dispatching of processed products and trade distortions 

As stated under recital no 4 of Council Regulation (EC) No 247/2006, the quantities 
covered by the SSA are limited to the supply requirements of the OR, in order not to 
impair the proper functioning of the internal market or to provoke diversions of trade 
in the products concerned. Dispatching  or exporting those products from  the  OR is 
therefore  prohibited.  However,  dispatch  or  exportation  of  those  products  is 
authorised where the advantage resulting from the SSA is reimbursed or, in the case 
of processed products, to permit regional trade or traditional trade flows as provided 
for by Article 4 of the above Regulation.  

These traditional quantities  have  been determined on the  basis of the average  trade 
flows  between  1989  and  1991,  i.e.  before  the  start  of  the  POSEI  scheme.  The 
Commission  considers  that  there  is  no  need  to  revise  traditional  quantities.  Such  a 
revision would be contrary to the scheme's objective of limiting the supplies to the 
local  needs  and  might  determine  trade  distortions.  Nevertheless,  trade  in  SSA 
processed products shall be encouraged among the OR. 

4.2.5.  Maintenance and development of agricultural activities  

The SSA has an essential role for the preservation of local production structures by: 

• 

• 

Supporting the profitability of the local livestock breeding. 

Ensuring the viability of the local agro-food industry. 

As a consequence, the SSA creates additional local employment in agriculture and in 
the agro-food industry. 

On  the  other  hand,  the  level  of  aid  determined  for  the  supply  of  some  products  in 
certain OR (e.g. meat and milk products in the Canary Islands and Madeira) creates 
competition  with  the  local  production  of  the  same  products  that  can  thus  hardly 
develop.  It  is  the  responsibility  of  the  MS  to  improve  the  distribution  of  funds  in 
order to privilege local productions. 

4.3. 

Support to the Local Production 

4.3.1.  Maintenance and development of the local agricultural production  

The POSEI scheme, adapted as it is to the specificities of the OR, is essential at least 
to reduce the regression of the agricultural activities. As illustrated in the evaluation 
study, it contributes to maintain most productions and even to develop some of them. 

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The profitability and the competitiveness of a number of sectors supported by POSEI 
have increased also thanks to the complementary Rural Development measures. 

Since the POSEI reform, the revenue of virtually all producers has increased. 

Globally,  the  POSEI  measures  have  been  very  effective  for  the  export  sectors  of 
banana in the biggest producing regions (Canaries, Guadeloupe and Martinique), and 
sugar (Guadeloupe, Martinique and Reunion), which benefit of an important level of 
support but give also good results in terms of maintenance of the level of production 
and of revenue, as highlighted in the evaluation study. 

More  production  of  meat  and  milk  has  been  registered  in  the  livestock  sector  in 
Reunion and in the Azores. However, the meat and milk sectors do not have the same 
positive  results  in  all  OR.  In  fact,  they  have  not  proven  particularly  effective  in 
Madeira and the Canaries. 

Difficulties  have  been  noted  also  in  the  fruit  and  vegetables  sector  in  the  French 
Departments,  where  the  aids  have  a  limited  penetration  due  to  the  obligation  for 
producers to associate in order to receive aid (particularly in Guyana); other products 
in the sector, intended for export, that also undergo difficulties are the pineapples in 
the Azores and the tomatoes in the Canaries. 

Concerning  the  banana  sector,  important  progress  has  been  registered  in  terms  of 
increased profitability, effects on the productivity, the quality and the environmental 
production conditions. 

Regarding  the  sugar  sector,  in  the  French  Departments,  the  support  allows  to 
counterbalance the effects of the 2006 sugar reform to maintain an acceptable level 
of  price  for  the  producers,  the  viability  of  the  sugar  processing  industries  and  thus 
fair conditions of competition on the EU market. However, the sugar sector is facing 
difficulties  in  the  Azores  in  spite  of  the  support  granted  under  POSEI.  In  order  to 
mitigate  these  difficulties,  the  legislators  have  adopted  in  May  2010  a  legislative 
proposal. 

4.3.2.  Quality production 

POSEI,  in  complement  with  the  Rural  Development  Programs  (RDPs),  is  a  very 
useful tool to support quality local production that can compete with import products, 
which are no longer the only choice on the local markets. 

The  logo  that  local  export  producers  may  use  upon  authorisation  by  the  national 
competent authorities contributes to the quality labelling of the production of the OR 
in the EU. 

5. 

FINANCIAL EXECUTION 

Data  on  the  financial  execution  of  the  POSEI  programmes  from  2006  to  2008 
(financial  years  2007-2009)  is  reported  in  Annex  I.  This  data  shows  an  increasing 
utilisation of POSEI funds over that period. 

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In particular, some measures have exhausted the allocated financial resources in the 
last years. This is particularly evident for the diversification measures in the livestock 
and  vegetable  sectors  of  the  French  DOM,  which  have  known  an  unexpected 
development in the last years. The insufficiency of funds led the French authorities to 
apply  "stabilizers"  (pro-rata  reductions  of  the  aid  depending  on  the  budgetary 
deficit). This was overcome by the authorisation of additional national financing as 
from 2010. 

It  is  also  evident  that  the  annual  SSA  budget  is  nearly  fully  executed  in  almost  all 
OR. The SSA annual allocations were established in 2005/2006 for each MS on the 
basis of the historical execution in 2001-2003 and are fixed. Within each programme, 
the  situation  may  be  improved  by  redistributing  the  available  budget  among  the 
measures  where  margins  exist.  Moreover,  Article  16  of  Council  Regulation  (EC) 
No 247/2006 allows MS to grant additional financing for the SLP measures. 

However,  concerning  the  SSA,  the  ceilings  fixed  by  Article  23(3)  of  Council 
Regulation  (EC)  No  247/2006  cause  certain  rigidity.  It  is  thus  proposed  to  allow  a 
more  flexible  redistribution  of  funds  between  SLP  and  SSA  within  the  allocated 
budget (see § 8.1). 

6. 

AUDIT ON THE IMPLEMENTATION OF THE POSEI SCHEME AFTER 2006 

The Commission's audit services have undertaken clearance of accounts enquiries in 
the  Azores,  Madeira  and  Reunion  in  2008,  in  the  Canaries  in  2008  and  2009,  in 
Martinique and Guadeloupe in 2009. 

In general, the situations established during these audits show a marked improvement 
over  those  noted  for  earlier  years,  although  some  deficiencies,  still  to  be  fully 
investigated  in  the  clearance  of  accounts  context,  are  being  notified  with  regard  to 
measurement of banana plantations under the POSEI programme for the Canaries. 

7. 

RELEVANT TRADE-RELATED DEVELOPMENTS AFTER THE 2006 REFORM 

7.1. 

Economic Partnership Agreements (EPAs) 

Since 1.1.2008, EPAs have allowed duty- and quota-free access to the EU market for 
a  number  of  African,  Caribbean  and  Pacific  (ACP)  countries.  A  number  of  ACP 
countries produce export commodities which also form a large part of ORs' exports, 
such as bananas, sugar, rice, meat, and other fruit and vegetables. The most relevant 
commodities concerning the ORs are sugar and bananas. 

For  bananas,  the  Commission  conducted  an  impact  assessment  before  the  banana 
CMO reform in 2006. This assessment took into account the likely consequences of 
EPAs, and led to the transfer of a higher budget from the banana CMO to the POSEI 
scheme. EU imports of ACP bananas grew year-on-year by almost 10% in 2008 and 
again  by  4%  in  2009.  After  a  considerable  fall  in  production  in  Martinique  and 
Guadeloupe due to Hurricane Dean of August 2007 (see Annex III), ORs' production 
rose again, by 2.7% in 2008 and 7.4% in 2009. 

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For sugar, EPAs introduced duty- and quota-free imports from 1.10.2009, subject to 
a  transitional  safeguard  until  2015  for  ACP  countries  which  are  not  also  Least 
Developed Countries (LDCs). This may result in higher imports from ACP countries 
– LDCs and non-LDCs alike. However, in the short run such imports are unlikely to 
reach  the  level  of  3.5m  tons  forecast  in  the  2006  sugar  reform.  As  such  the  EPAs 
have so far had no direct impact on the sugar sector in the ORs. 

7.2.  WTO and bilateral trade agreements 

The  EU  has  recently  concluded  multilateral  and  bilateral  agreements  which  alter 
import tariff preferences for certain commodities. These changes may affect the OR 
producers'  ability  to  compete  on  the  EU  market.  Products  affected  are  likely  to 
include  rum,  certain  fruits  and  vegetables,  cane  sugar  and  processed  products 
containing high levels of wholly-obtained cane sugar. 

Concerning  bananas,  the  EU  initialled  an  agreement  on  15  December  2009  with 
Latin American producers, also known as Most Favoured Nation (MFN) producers. 
The agreement entails a gradual reduction in the EU's import tariff from €176/tonne 
to €114 over seven to nine years. The EU also  agreed further cuts in its banana duties 
to €75/tonne by 2020 in two bilate ral agreements which it concluded in the first half 
of  2010,  one  with  Columbia  and  Peru,  the  other  with  Central  American  countries. 
Another  major  banana-exporting  country,  Ecuador,  has  expressed  an  interest  in 
joining the EU's agreement with Colombia and Peru. 

Following the end of the Special Framework of Assistance (SFA) for traditional ACP 
suppliers  of  bananas  that  operated  from  1999  to  2008  with  a  budget  of  €375m  in 
favour of traditional ACP banana-exporting countries, the Commission proposed to 
mobilise  up  to  €200m  over  the  period  2010- 2013  in  favour  of  the  ten  main  ACP 
banana-exporting  countries  (Banana  Accompanying  Measures  –  BAM)  in  order  to 
assist them in their necessary adjustment process. 

For  OR  producers,  the  reform  of  the  banana  CMO  in  2006  has  already  taken  into 
account  the  effects  of  the  new  trading  environment  to  a  large  extent.  The  impact 
assessment carried out before the reform examined the likely consequences of cuts in 
tariffs  comparable  to  those  agreed  recently.  Based  on  the  fact  that  POSEI  ensures 
that  banana  producers  receive  the  full  amount  for  which  they  are  eligible,  even  if 
they do not quite reach the corresponding level of production, the assessment showed 
that changes in the EU's import tariffs, if kept within certain thresholds, would have a 
limited impact on EU production (see Annex IV) 

To accompany the banana  reform, the amount transferred to POSEI was calculated 
on  the  most  favourable  average  of  aid  paid  to  banana  producers  for  2000-02, 
increased by a margin of 8.4% to reflect a certain variability of the banana market in 
a  scenario  of  further  liberalisation.  In  reality,  the  banana  budget  rose  by  an  even 
greater rate - some 47% - when based on the average support paid between 2002 and 
2006. Nevertheless given the recent market developments, the Commission is closely 
monitoring  the  impact  of  multilateral  trade  agreements,  and  will  take  appropriate 
action to mitigate should it be necessary.  

For sugar, the possible reduction of import duties and/or introduction of new Tariff 
Rate  Quotas  as  part  of  ongoing  multilateral  talks  in  the  Doha  Round  could  lead  to 

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over-supply  and  possibly  influence  internal  EU  sugar  prices.  Council  Regulation 
(EC) No 1234/2007 requires the Commission to preserve the structural balance of the 
market at a price close to the reference price. Several market measures are available 
to cope with such a situation, such as withdrawal or private storage. These measures 
affect the production of quota sugar. However, the ORs produce less sugar than their 
allocated quotas, so the impact of these measures should be limited. 

8. 

IMPROVEMENT PROPOSALS 

8.1. 

Proposed amendments to EU legislation 

Considering the development of the scheme in the last years and the recent entry into 
force  of  the  Lisbon  Treaty,  it  is  proposed  to  recast  Council  Regulation  (EC) 
No 247/2006  to  update  and  simplify  some  provisions  and  to  align  it  to  the  new 
requirements of the TFEU. 

In  particular,  it  is  proposed  to  amend  Article  4(2)  to  include  the  possibility  of  free 
trade in SSA processed products among the French DOM (see § 4.2.4).  

It  is  also  proposed  to  amend  Article  23(3)  to  increase  the  maximum  annual  SSA 
ceilings for France and Portugal - within the existing financial allocations - so as to 
release pressure on the part of the envelopes reserved to SSA and to allow additional 
products to be introduced in the forecast supply balances of the OR in need without 
increasing the overall budget (see § 5). 

Finally, in order to reduce the administrative burden and to allow MS more time to 
determine the actual needs and finalise a strategic approach for the subsequent year 
(see § 4.1) the Commission intends to amend Article 49 of Commission Regulation 
(EC) No 793/2006. The amendment shall consist in postponing the deadline for the 
submission  to  the  Commission  of  the  annual  programme  modifications  for  the 
following  year  from  1  August  to  30  September.  Such  modifications  shall  be 
examined  by  the  Commission  services  and  approved  by  letter  of  DG  AGRI  unless 
they imply major amendments, such as the introduction of a new measure (chapter) 
into the programme. In this case, modifications shall be submitted by 1 August and 
approved by Commission Decision. 

8.2. 

Recommendations to the Member States 

The MS are in the process of establishing appropriate control systems to verify the 
proper  transmission  of  the  SSA  advantage  to  the  end-user  (§  4.2.3).  They  are 
invited to put them quickly in place and to report to the Commission. 

The MS are recommended to adjust the level of the SSA aid for those products that 
are also produced locally in such a way as to give priority to the development of the 
local production (§ 4.2.5). 

The MS are recommended to examine in depth the reasons for the limited success of 
the measures that do not attain their objectives (§ 4.3.1) and propose an improved 
strategy of support in their programmes. The flexibility granted to the MS with the 
reform  to  manage  their  programme  can  be  very  effective  to  deal  with  particular 
situations.  In  order  to  assist  sectors  in  difficulty,  MS  can  reallocate  the  POSEI 

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envelope  within  the  programme  and  even  grant  additional  aid,  thanks  also  to  the 
more flexible provisions concerning State Aid foreseen for the OR (§ 5). 

In the context of these strategic choices, MS should privilege measures favouring the 
maintenance and creation of local employment. 

MS  are  also  invited  to  regularly  report  on  the  basis  of  the  key  indicators  that  the 
Commission services are establishing in order to allow an overall evaluation of the 
progress of the POSEI scheme over the years. 

Finally,  it  is  to  be  underlined  that  the  initial  definition  of  the  POSEI  programmes 
required the participative approach of all stakeholders: this should be the case also 
for  the  annual  modifications  of  these  programmes.  The  envisaged  amendment  of 
Article 49 of Commission Regulation (EC) No 793/2006 postponing the deadline for 
their submission (§ 8.1) will allow more time for consulting the concerned operators. 

9. 

CONCLUSIONS 

In the first implementation years, the POSEI scheme has proven successful in terms 
of programming approach (undoubtedly more flexible and closer to the local needs), 
of guaranteeing the supply of essential products by mitigating the additional costs for 
their  delivery,  of  supporting  the  revenue  of  farmers  in  the  OR  and  of  developing 
certain agricultural sectors. 

Based  on  the  current  analysis  and  situation,  the  Commission  considers  that  the 
financial  envelope  allocated  to  POSEI    has  enabled  the  broad  objectives  of  the 
scheme to be met. 

The  role  of  MS  in  the  implementation  of  the  POSEI  scheme  is  crucial.  MS  should 
reflect  on  a  more  targeted  reallocation  of  available  resources  to  support  emerging 
sectors and productions that have shown more difficulties than others. 

Both  the  Commission  and  the  MS  must  continue  their  efforts  towards  the  best 
possible  implementation  of  the  scheme  and  in  particular  to  pursuit  the  objectives 
food  self-sufficiency  and  diversification  from  the  traditional  export  production 
sectors,  in  order  to  ensure  the  viability  of  the  agricultural  activity  also  in  case  of 
targeted market crises. 

Employment  in  agriculture,  which  should  be  maintained  and  increased  where 
possible,  quality  of  the  production  and  preservation  of  the  environment  are  also 
essential objectives to be aimed at. 

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