REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the case for an optional quality term ‘product of island farming’
Date: 2013-12-16
Institutions: European Commission
Subjects: agricultural product, consumer information, designation of origin, island, originating product, product designation, quality control of agricultural products













EUR-Lex - 52013PC0888 - EN











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52013PC0888

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the case for an optional quality term ‘product of island farming’ /* COM/2013/0888 final */









TABLE OF CONTENTS
1........... Introduction.................................................................................................................. 3
2........... Situation with regard to island
farming........................................................................ 3
2.1........ The socio-economic
importance of island farming......................................... 5
2.2........ Agriculture
production on islands.................................................................. 6
3........... Existing labelling schemes
across the Member States.................................................. 7
4........... The case for an optional quality
term............................................................................ 9
4.1........ ‘Horizontal’
characteristics of products or farming practices......................... 9
4.2........ Adding
value................................................................................................ 10
4.3........ European
dimension..................................................................................... 10
5........... Conclusion.................................................................................................................. 10
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE
COUNCIL
on the case for an optional quality term
‘product of island farming’
1.           Introduction
Article 32 of Regulation (EU) No 1151/2012 on
quality schemes for agricultural products and foodstuffs[1] requires the Commission
to present a report to the European Parliament and to the Council, no later
than 4 January 2014 and accompanied if necessary by appropriate legislative
proposals, on the case for a new term ‘product of island farming’.
Article 32 states that the term can be used only
for products:
·     
intended for human consumption and listed in
Annex I to the Treaty; and
·     
the raw materials of which come from islands;
and
·     
in the case of processed products, processing
must take place on islands where this substantially affects the particular
characteristics of the final product.
The Commission has taken a range of steps to gain
a better understanding of island farming across the Union, consulting Member States and stakeholders[2]
and holding discussions in the relevant fora[3].
In June 2013, it organised a two-day workshop on the Products of Island Farming
and Food Industries’[4].
These activities and the JRC scientific and policy report[5] drawn up after the
workshop have provided essential input to this report.
This report examines the socio-economics and
specificities of island farming, reviews existing labelling schemes and
reflects on the merits of establishing an optional quality term (OQT) for ‘product
of island farming’. 
2.           Situation with regard to island farming
For the purpose of this report:
–                        
‘product of island farming’ OQT is a
generic/horizontal term to appear on the label of a product with no reference
to the name of a specific island nor figurative content such as a logo. 
The term may be used only to describe products:
(1)   intended for human consumption;
(2)   listed in Annex I to the Treaty; and

(3)   the raw materials of which come from islands. 
For processed products,
processing must take place on islands in cases where this substantially affects
the particular characteristics of the final product[6].
–                        
‘island farming’ means the production of agricultural
products and foodstuffs on islands;
–                        
‘island product’ means an agricultural product
or foodstuff produced on an island. 
Unlike some other geographical concepts, ‘island’
seems easy to define: it is a
piece of land surrounded by water. However, more
precise definitions have often been used for specific purposes, taking into
account additional criteria such as:
·     
size (in terms of area or population);
·     
the existence of fixed links or distance to the
mainland; or 
·     
the existence of a regional administrative
authority. 
For statistical purposes, Eurostat has
laid down the following criteria to define an island: 
(i)      minimum
surface area of 1 km2;
(ii)     minimum
distance of 1 km between the island and the mainland;
(iii)    resident
population of over 50;
(iv)    no fixed link
to the mainland (e.g. bridge, tunnel, dyke); and
(v)     not the site
of an EU capital. 
Applying such criteria in the context of
agriculture product labelling would give rise to some difficulties. For
example, islands that are permanently connected to the mainland, but economically
not really integrated, would be excluded, as would many islands with small
populations. An archipelago with over 50 inhabitants but made up of several
islands which each have fewer (this applies to many Finnish and Swedish
islands) would not be covered although  facing similar difficulties.
For the Structural and Cohesion Funds[7], islands are ‘island
Member States eligible under the Cohesion Fund, and other islands except those
on which the capital of a Member State is situated or which have a fixed link
to the mainland’. Unlike the Eurostat definition, this includes all small and
coastal islands and two island Member States (Malta and Cyprus), though not Ireland or the United Kingdom, nor many small islands with a fixed link to the
mainland. 
Given the varying definitions, it is
difficult to say exactly how many islands there are in the EU. Estimates range
from about 300 using the most restrictive definitions (no fixed link, minimum
size, etc.) to over 300 000 (mostly in Finland and Sweden) if purely geomorphological criteria are applied[8].

While these islands are
very diverse in geomorphological, natural, demographic, cultural and
administrative terms, some broad common features can be identified: 
·     
many islands are mountainous;
·     
their climate is often naturally maritime;
·     
their location entails ‘peripherality’ and poor
accessibility;
·     
their natural capital is unique and fragile;
·     
their demography is usually dynamic (except for
smaller islands, which tend to be affected by depopulation);
·     
they benefit from a strong cultural identity;
and
·     
in many cases, they have an autonomous
administration.
How
one defines an ‘island’ depends on the purpose for which the definition is
required. As regards labelling of island farm products, we need to identify
precisely what the label is to convey in order to decide on the definition to
apply.
2.1.        Socio-economic importance of
island farming 
Agriculture
and food industries are important sectors for the EU’s island economies.
Agriculture, forestry and fishing represent 2.7 % of their gross value added
(GVA), as compared with 1.6 % of total EU-27 GVA. Their food industry is also
more important than that on the mainland, representing 19 % of industrial
employment as against 13 % at EU level. 
The
national prominence of islands in agriculture is greatest in Greece and Italy, in particular because of their three large islands (Sicily, Sardinia and Crete). Sicily and Sardinia account for over half of the EU’s island farming production in
terms of value; Crete, the Azores and Réunion for 5‑10 %. 
On
the basis of the Farm Structural Survey figure of 572 000 farms on NUTS 2
island regions in the EU in 2011, the total number of island farms can be put
at around 600 000. Their total farm output has been estimated at € 11.4 billion
a year. 
Island
farming faces the following structural challenges:
·     
agricultural area per holding is less than the EU
average;
·     
island farms are less labour intensive than those
on the mainland;
·     
isolation entails higher transport costs (inputs
can cost two to three times more than on the mainland);
·     
the limited number of inhabitants limits the
diversity of production and thus the degree of local competition;
·     
depopulation can result in the loss of specific
know-how;
·     
production is often specialised and thus more
sensitive to shocks in the international economy;
·     
water and energy supply and waste management can
have an adverse effect on the island agriculture. 
Stakeholders
have argued that these challenges actually have a positive impact on the qualities/characteristics
of island products and local production methods. Agricultural production on
islands exploits local characteristics which favour quality and there are close
links between primary production, processing and marketing, which are carried out
to a very high standard based on traditional know-how. In addition, the
particular isolation of some islands has contributed to improving local
processing techniques. 
2.2.        Agricultural production on islands
Two
major product groups predominate: fruit and vegetables, and specialised
crops like olives and wine. The total production value of these two groups
represents 4.7 % and 3.6 % of the EU total in the respective sectors
and close to 60 % of the total value of EU islands’ agricultural
production, as against only 30 % in the EU as a whole. 
Island
farms mostly specialise in horticulture. With some exceptions (e.g. cereals
in Sicily and sugar cane on some tropical islands), cereals and arable crops
are under‑represented as compared with the EU generally. 
Animal
production on islands is characterised by the importance of sheep and goat specialised
farms. The production of sheep and goat meat in terms of value is three times
more important on islands than on average in the EU.
Member States’ and
stakeholders’ opinions are divided, however, when it comes to the specificity
of island products’ characteristics. 
Some believe that
island products have specific characteristics due to:
·     
traditional know-how;
·     
particular climatic conditions that influence
maturation, processing and transport; and
·     
the nature of locally sourced raw materials. 
These specific characteristics are seen as directly linked to
traditions, expertise and recipes passed down from generation to generation and
unique conditions applying to local cultivation and the rearing of indigenous
breeds. 
Others argue that it is difficult to demonstrate
the specificity of island products as
compared with products from coastal areas
on the mainland, arguing that they have no particular characteristics
that depend on being processed on an island apart from origin per se. There
are no exemples of processing which must necessarily take place on the island
and it may even be mistaken to regard certain production steps, such as smoking
or drying, as unique by virtue of the island climate, since this may be no
different from that on the coast of the nearby mainland. 
To conclude on the findings indicated above:

 Island agriculture has some common features, but these relate
     mainly to structural challenges rather than specificities reflected
     in the products. These challenges are already subject to various measures such
     as the Structural Funds, rural development programmes, direct aid schemes
     under the common agricultural policy, transport policy, research
     programmes, local development strategies, etc.
 The structural challenges can be regarded as having a positive
     impact on the qualities/characteristics of island products and on
     production methods (e.g. by maintaining quality, know-how and raw
     materials, and improving local processing techniques). 
 While combinations of natural and human factors can result in
     particular characteristics in island products, these are normally specific
     to a given island. As islands are very diverse, it seems
     unrealistic to identify specific characteristics common to all their products,
     or at least to Annex I products for human consumption. 

3.           Existing labelling schemes
across the Member States
There is currently no legal instrument at EU
or national level specifically devoted to protect products originating from
island products or island farming as such. 
The following
indirectly cover the marketing of island farming products and protect them
against misuse and misleading or unfair practices:
·     
EU quality schemes, in particular:
-      
protected designations of origin (PDOs) and
protected geographical indications (PGIs); and
-      
the POSEI Regulations on agriculture in the outermost
regions[9],
which cover mainly island territories and provide for an official EU quality
scheme (hereafter designated as ‘RUP logo’[10]);

·     
‘common right’ rules, i.e. EU and Member
State trademark systems, unfair competition and general consumer protection
rules as well as the food information for consumers Regulations at EU and
Member States' level; 
·      a combination of instruments such as regional collective or
certification trademark systems with EU quality schemes (RUP logo, PDO/PGIs or organic
farming). 
A number of examples
of agricultural or food products labelled with a reference to insularity have
been collected in a non-exhaustive inventory of cases based on
·     
practices identified
from OHMI and WIPO trademark databases;
·     
labels found on the market;
·     
EU quality schemes; and
·      collective regional brands and initiatives. 
Only a small share contains and refers to the
generic/horizontal term ‘island’ and/or its translations. Of the 8 400 trade
marks collected concerning agrifood and beverage product, most of the cases
include the name of a specific island and only around 1 360 include the
term “island” as such or its translation, 16% of all the collected trade marks.
Some of these, usually accompanied by a more precise geographical term
identifying a specific island territory, are genuinely for island farming products,
but 80 % (fancy names, trademarks, etc.) are not.
85+ % of the labels inventoried refer to
a specific island territory, as well as to the origin of the product from this
specific island territory or archipelago, for example Sardinia, Azores, Madeira
or Martinique. Trademark holders are more interested in conveying narrow,
well-defined origin than making a generic reference to their products coming
from an island.
Many territorial brands have been
registered for EU island products[11].
Many islands and/or archipelagos have one or several collective brands which,
at the same time, make the understanding for the consumer difficult. These
brands are based on collective or certification trademarks owned by groups of
private stakeholders, local authorities or public-private partnerships and all
of them are semi-figurative trademarks (i.e. with a name and a symbol). 
The RUP logo is used to promote very
specific quality products from the outermost regions in the EU. These products are
subject to requirements as to quality, cultivation, production or manufacturing
techniques, or presentation and packaging. The logo is most commonly used for
bananas from Guadeloupe, Martinique, the Canary Islands and Madeira, but also
for other fruit (e.g. pineapples and melons) and vegetables, flowers and
wine from these regions.
Insular PDOs/PGIs represent around 10 %
of all agrifood geographical indications registered in the EU: on 1 October
2013, 118 of 1 158 PDO/PGI products were produced on islands. 50 island
wine names are also protected under EU quality schemes. A total of 168
registered PDO/PGI products thus originate from EU islands. PDO/PGI products account
for around 5 % of the total value of EU islands’ agricultural production
(JRC report). 
Geographical names primarily refer to the
name of the island in question (52 % of the cases, mostly Greek, plus Sardinia,
Corsica and the Canary or Balearic Islands), sometimes with additional names
(particularly in the case of designations from Crete, which generally give
further details on the part of the island the product is from). In other cases
(32 %), the designation refers to a locality on an island. This is the
case for most of the Sicilian designations, but also for others such as
Stornoway in the Outer Hebrides, etc. In a few cases (8 %), the reference
is to the name of an archipelago (e.g. the Azores, Shetlands, Orkneys and the
 Canary Islands).
The collected opinions of Member
States/stakeholders and the survey of PDO/PGI logos show that:
·     
producer groups do not systematically communicate
the island origin in their logos. Logos are normally not focused on the
respective island. Most of the time, fanciful logos are used;
·     
PDO/PGI schemes are the preferred means of conveying
the specificity, particular characteristics and quality of island products. Reference
is usually made to the name of the specific island in
question, the locality or region of origin; 
·     
there are few examples of the use of the generic
term ‘island products’ as such: 
-       
Denmark (honey from Læsø Island brown bees, apples from Fejø Island in the South Sea);
-       
Finland (‘Åland sheep’
or ‘archipelago product’); and
-       
the Netherlands (‘Waddengoud’);
or of the collective
regional logos created by the regional authorities in Madeira (‘product of
Madeira’) and the Canary Islands (‘Tenerife Rural’, ‘Gran Canaria
Calidad’, ‘Alimentos del Hierro’). 
Stakeholders also provided evidence of
misleading labelling practices or ‘fraudulent’ island agricultural products (cheap
imitations offered to tourists) and stressed the need to protect the
authenticity of EU islands’ farming products. 
To summarise, there are many registered PDOs/PGIs
for products from EU islands but these do not cover a significantly higher proportion
of products than on average in the EU. There are also a high number of private
labels which refers to an island origin with the majority referring to the
specific island territory. 
4.           The case for an optional
quality term 
OQTs are established
under Regulation (EU) No 1151/2012 to help producers communicate the value
added characteristics or attributes of their agricultural products. They are
defined in Article 29(1) of the Regulation as:
-       
relating to the ‘horizontal’ characteristics of
one or more categories of products or to farming or processing attribute which
applies  in a specific area;
-       
adding value to a product as compared with
similar ones; and
-       
having a European dimension.
4.1.        ‘Horizontal’ characteristics
of products or farming practices
The diverse geography of the
EU’s islands gives rise to significant and diverse production of agricultural
and food products, in particular specialised crops (fruit, vegetables,
potatoes, olive oil and wine), but also animal products (sheep and goat meat
and, to a lesser extent, dairy products and cattle). 
The agrifood sector plays
a significantly greater role in EU island economies than in the EU on average
and often remains closely related to the main economic activity: tourism. Many
islands have development strategies involving ‘smart specialisation’ to exploit
synergies between tourism and the local agrifood sector. 
Local savoir faire,
traditions, the wealth of the natural capital and local biodiversity in terms
of specific plant varieties and indigenous animal breeds all place the agrifood
sector among the drivers of growth for EU islands, particularly by developing
high‑value‑added ‘niche’ products. 
While common to farming
practices in islands in general, however, these elements manifest themselves differently
in products specific to each island and thus do not necessarily translate into ‘horizontal’
characteristics common to all island products as a category.
4.2.        Adding value
Although all EU islands share characteristics
which could potentially be conveyed by a generic labelling term such as ‘product
of island farming’, feelings about the added value of such labelling seem to be
mixed. 
When marketing their food products, the vast
majority of producers convey the concept of insularity by referring to a specific
island or archipelago. No example has been found of a brand or quality
scheme covering all islands regardless of their precise location. ‘Horizontal’
labels are used for groups of small islands like several small Danish islands or
for ‘archipelago products’ (Finland), but this is still far from a horizontal
generic island farming labelling scheme. 
Moreover, in some cases islands are in
competition with each other and the reference to a specific island is key for
producers wishing to stand out on the market.
4.3.        European dimension 
EU islands share common
features in terms of geography, natural, human and social capital, and economic
and political dependency on the mainland. 
According to the trade
patterns in the JRC-IPTS’ regional ‘social accounting matrices’ for 2005[12], an
average of around 60 % of EU islands’ agricultural output in value
terms and 35 % of their food industries’ output is ‘exported’,
mostly to the mainland of the respective Member State. Only 7 %
(Madeira) to 18 % (Canary Islands) of their agrifood output goes
to other Member States or third countries, but these products already benefit
from an EU scheme (RUP logo). 
5.           Conclusion
Most of the difficulties
faced by EU islands and their farming sectors are structural and require
primarily structural solutions and policy responses, already partly in place
through regional policy and rural development measures on the one hand and
subsidies to compensate for specific handicaps on the other.
Not all island agrifood
products benefit from existing schemes and public or private initiatives to
improve quality and add value on the market. For example, only around 5 %
(in value terms) are covered by PDOs/PGIs and the RUP logo, while used, targets
specific outermost region
products that satisfy certain requirements. On the other hand, many private
standards have been put in place referring often to specific geographical
origin. However, the situation seems uneven between islands across the EU. 
Arguments in favour of a ‘product
of island farming’ OQT are that: 
Ø 
as a voluntary instrument imposing a
relatively light administrative, control and budgetary burden, an OQT might suit
some small‑scale producers, in particular on small islands not benefitting
from a sufficient scale to engage in other marketing tools (such as collective,
certification and territorial brands, PDOs/PGIs and the RUP logo).This would
only be relevant for a small part of island products. 
Ø 
besides functioning as a communication and
marketing tool, an OQT could add value to some island farming products , in
particular if Member States were to ensure that it is integrated with or linked
to other measures; and
On the other hand:
Ø 
a ‘product of island farming’ OQT could penalise
producers already engaged in quality schemes by placing them in
competition. There is a risk of diluting existing initiatives
(territorial marks, PDO/PGIs, etc.) which are subject to stricter control
and/or certification and therefore extra costs; 
Ø 
the fact that there are currently no generic
labels for island products (labelling and promotion refer to specific
islands) is an indication that the ‘island’ concept is not considered
sufficiently strong or appropriate to convey particular messages to consumers.
The only example that comes close to sending such a message, the RUP logo, has
a limited scope of application. An OQT could negatively impact these existing
scheme; 
Ø 
as most island products are not exported but sold
locally or on the mainland of the Member State in question, it can be argued
that regulation of labelling claims could be better addressed at Member
State level;
Ø 
the range of potentially eligible OQT
products is likely to be severely limited by the obligations foreseen in
Regulation (EU) No 1151/2012 in terms of sourcing of raw materials, processing
requirements and  limitation to Annex I products.
Ø  the structural problems faced by islands might be addressed by the existing
structural instruments. 
This report aims to provide factual analysis to
enable a debate on whether reserving a new ‘product of island farming’ OQT is
the right way to help island producers better communicate the characteristics that
add value to their products.
The Commission invites the European
Parliament and the Council to discuss this report and welcomes their feedback. 
[1]               Regulation (EU) No 1151/2012 of the European
Parliament and of the Council of 21 November 2012 on quality schemes for
agricultural products and foodstuffs (OJ L 343, 14.12.2012, p. 1).
[2]               Questionnaires to Member States and stakeholders (28
January 2013 and 6 June 2013).
[3]               Advisory group on quality policy and expert group for
sustainability and quality of agriculture and rural development. 
[4]               Seville, 13-14 June 2013. 
[5]               Santini F., Guri, F., et al. (2013), EU island farming and the labelling of its products,
JRC Scientific and Policy Reports, JRC84949
[6]               Article 32 of Regulation (EU) No 1151/2012.
[7]               Article 52 of Council Regulation (EC) No 1083/2006
laying down general provisions on the European Regional Development Fund, the
European Social Fund and the Cohesion Fund and repealing Regulation (EC) No
1260/1999 (OJ L 210, 31.7.2006, p. 25).
[8]               http://www.scb.se/Pages/PressRelease____275646.aspx.

[9]               Regulation (EU) No 228/2013 of the European
Parliament and the Council and Commission Regulation (EC) No 793/2006.
[10]             From the French régions ultra-périphériques.
[11]             Many islands and/or archipelagos have one or several
collective brands, which can be confusing for consumers.
[12]             Mueller, M. and Ferrari, E. (2012), Social
Accounting Matrices and Satellite Accounts for EU‑27 on NUTS 2 Level
(SAMNUTS2), JRC Scientific and Policy Reports, EUR 25687 EN.