Emmanuel JACQUIN

Olive oil & horticultural productsDG Agriculture and Rural Development - European Commission

« L’avenir de l’Organisation Commune de Marché Fruits et Légumes », Bruxelles, 21 October 2010

Aid regime for the Fruit & Vegetables sector in the EU: state of play

22

Outline

1. The reform of 2007

2. The evolution of Producer Organizations and Producer Groups

3. The post-2013 CAP

33

1. THE REFORM OF 2007

4

Impact analysis

�The reform was based on an impact analysis which examined the followingoptions:

• « transfer option »: almost total dismantling of the CMO and transfer of the EU contribution to POs to the second pillar and to the Single Payment Scheme•« PO+ option »: reinforcement of POs•« status quo scenario »

�Several difficulties were identified as concerns the « transfer option »:

•the problem of including new operations at that stage of rural development programming, •the obligatory national co-financing in the second pillar•and the unequal distribution of support at that time (reflecting the uneven grouping of supply through POs) between the Member States, which would have been perpetuated.

�The impact analysis concluded that the « PO+ » option gathered the maximum of advantages.

55

�Enhance competitiveness and market orientation

�Make POs more attractive

�Increase flexibility and reduce administrative burden

�Reduce fluctuations in producer incomes, resulting from crises

�Increase consumption of fruit and vegetables in the EU

�Continue the sector’s efforts to maintain and protect the environment

�Simplify the legislation

Aims of the reform

66

�Abolition of export refunds

�Abolition of Community Withdrawal Compensation (CWC)

�Limit of Community financing for Operational Funds kept at 4.1% of the VMP, but with a possibility to go up to 4.6% if the excess is used solely for crisis prevention and management. No total EU budget ceiling.

�50% EU financing (60% in some cases)

�Increase in national financial assistance and corresponding Communityreimbursement

�€ 6 mio increase for promotion (in the horizontal regulation)

Budget redistribution

7

� planning and adjustment of production to demand� optimising production costs and stabilising producer prices, � concentration of supply and the placing on the market of the

products produced by the members of the PO, � improvement of product quality,� boosting products’ commercial value,� promotion of the products, whether in a fresh or processed form,� environmental measures and methods of production respecting the

environment, including organic farming, � crisis prevention and management.

Aims of the operational programmes

8

Further steps (2008/2009)

� Integration into the Single CMO: Council Regulation No 1234/2007

� School Fruit Scheme: 90 million € per year, 25 Member States participating in 2010/11

� Simplification of marketing standards in 2008:

repeal of 26 of the 36 specific marketing standards (SMS) for fresh fruit and vegetables and

maintained the SMS for 10 products which represent approximately 75% of trade in value terms.

For most of the other fresh F&V products, the General Marketing Standard has been introduced.

� EU expenditure for fruit and vegetables (excluding direct aids): 793,7 million € in

2009

9

EU expenditure for fruit and vegetables(in million €)

681582577Of which, operationalprogrammes of POs

7941.1531.250Expenditure F&V

200920082007Million €

NB excluding direct aids

1010

Recent developments

�Ongoing recast of the implementing rules in the fruit and vegetables sector – Commission Regulation (EC) No 1580/2007.

�Commission Regulation (EU) No 687/2010 of 30 July 2010A priority was given to a shorter amendment of the same regulation focusing on

•calculation of the value of the marketed production for processed products,

•crisis prevention and management: provisions to encourage free distribution as preferred destination of withdrawn products and to allow for more flexibility on the quantitative limit for withdrawals.

�Report of the High Level Group on milk, influenced by concepts alreadypresent in the Fruit and Vegetables regime (e.g. contractual relations, strenghtening of producer negotiating power, inteprofessional organisations), to be followed by Commission proposal by the end of 2010.

1111

Next steps

�Alignment of the sCMO to the Lisbon Treaty, Commission proposal by December 2010 (delegated acts vs implementing acts)

�Review of the EU quality policy, Commission proposal by December2010

�School Fruit Scheme: evaluation in 2012 and possible review.

�Report to the European Parliament and the Council on the implementation of the regime as regards producer organisations, operational funds and operational programmes, to be presented by the Commission by December 2013.

�Post-2013 CAP

1212

2. THE EVOLUTION OF

PRODUCER ORGANISATIONS AND

PRODUCER GROUPS

1313

Remarks

�Source: Annual Reports transmitted by the Member States

�Data on the impact of the 2007 reform are not available yet

�Provisional data, to be submitted to further checks

1414

Organization rate of POs, APOs and PGs in EU

�Increasing trend of the organization rate over the past years for EU 15 and EU 10

�Apparent overalldecrease, after the enlargement of 2007, due to the low organizationrate in EU 2 (<1%)

35,3% 34,8%36,0%

37,0%

30,5%

34,6% 35,3%

39,0%

33,5% 32,0%35,8%

9,2%8,5%8,6%

6,1%

33,8%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

45,0%

2000 2001 2002 2003 2004 2005 2006 2007

EU-15

EU-10

EU-27

1515

Organization rate of POs, APOs and PGs by Member State in 2007

89,1%

0,3%

46,1%

61,9%

34,4%

11,2%

31,9%

46,3%

87,1%

37,9%

26,2%

16,5%

38,6%

101,2%

27,1%

3,8%

11,3%

0,1%0,0%

8,8%

17,3%

50,9%

43,9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

BE BG CZ DK DE EL ES FR IE IT CY HU MT NL AT PL PT RO SL SK FI SE UK

�EU 27 average: 33,8%

�Organization rate varies greatly between MS

�Highest organization rates in NL, BE and IE (NL > 100% due to transnational members)

1616

Average VMP of POs in EU (mio€)

�1.506 POs in 2007 with a total VMP of 15.458 mio €

�Graduated increase of the averageVMP, both for EU15 and EU10

•EU15: +8,4% in 2007 vs 2006

•EU10: +12,6% in 2007 vs 2006

9,63

8,99

8,07

9,77

8,87 8,749,16

10,44

3,843,413,373,65

0,00

2,00

4,00

6,00

8,00

10,00

12,00

2000 2001 2002 2003 2004 2005 2006 2007

EU-15

EU-10

1717

Comparison between VMP (mio€) and number of APOs in EU-27

22

19

11

12

16

14

18

22

2.718

1.7441.786

1.206

1.294

2.210

2.392

2.486

5

7

9

11

13

15

17

19

21

23

2000 2001 2002 2003 2004 2005 2006 2007

1.000

1.200

1.400

1.600

1.800

2.000

2.200

2.400

2.600

2.800

3.000

Number of APOs

VMP of APOs

�Constant increase of the VMP of APOs, in parallel with the growth of their number

�The VMP increased by 9,3% in 2007 whereas the number of APOs decreased by 13,6% => higher concentration/strongerAPOs (?)

1818

Comparison between VMP (mio€) and number of PGs in EU-27

244233

226235

10093

9990

321

321

259

201

123

106

125121

0

50

100

150

200

250

300

2000 2001 2002 2003 2004 2005 2006 2007

0

50

100

150

200

250

300

350

Number of PGs

VMP of PGs

�Constant increase of the VMP and the numberof PGs

�In particular after 2004 (enlargement EU10)

1919

Share of EU support in total VMP of the reference period in EU-27 in 2007 (POs)

3,9% 3,9%3,7%

3,0%

3,5%3,4%

2,7%

3,8%

2,3%

3,6%

4,0%3,9%

1,9%

4,1%

2,7%

4,0%

3,3%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

4,5%

Bel

giqu

e/Bel

gië

Dan

mar

k D

euts

chla

nd

Ellá

da

Esp

aña

Fra

nce

Ire

land

Ita

lia

Kyp

ros

Mag

yaro

rszá

g N

eder

land

Öst

erre

ich

Pol

ska

Slo

vens

ko S

uom

i/Fin

land

Sve

rige

Uni

ted

Kingd

om2007

Limit of 4,1 % of VMP

� Limit of 4.1% not reached in general

�Reached only by NL, SK and SE

2020

Better organization of the sector

� Larger number of POs and bigger VMP

�1506 POs in 2007 with a total VMP of 15.458 mio €

�Average VMP of 10,44 mio € at EU-15 and 3,84 mio € at EU-10 level in 2007

� Organization rate varies greatly between MS

�High increase for new MS (EU-10) : from 6% in 2004 to 9% in 2007

�Increase from 2004 in old MS (EU-15) : from 32% in 2004 to 39% in 2007

�Apparent status quo at EU level over the period 2000-2006 and decrease in 2007 because of very low rate in RO.

2121

3. THE POST-2013 CAP

22

From market intervention to policy innovation

Food security

Improvingproductivity

Market-stabilisation

Incomesupport

The Early Years

Productivity

Competitiveness

Sustainability

Over production

Exploding

expenditure

International

friction

Structural

measures

Budget ceilings

The Crisis

Years

Reduced surpluses

Environment

Income stabilisation

The 1992 Reform

Deepening the

reform process

Competiti-

veness

Rural

development

Stricter budget

ceilings

Agenda 2000

Market orientation

Consumer concerns

Rural development

Environment

Simplification

WTO compatibility

CAP reform 2003

Reinforcing

2003 Reform

New challenges

Simplification

CAP Health

Check 2008

What have we achieved so far?

23

… within a stabilised and improved spending framework(2007 constant prices)

0

10

20

30

40

50

60

70

19

80

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

% GDPbillion €

0,0%

0,1%

0,2%

0,3%

0,4%

0,5%

0,6%

0,7%

Export subsidies Other market support Coupled direct paymentsDecoupled direct payments Rural development % of EU GDP

EU-10 EU-12 EU-15 EU-25 EU-27

Source: European Commission - DG Agriculture and Rural Development

What have we achieved so far?

2424

Current structure of the CAP instruments

Direct payments

Decoupled support based on historical references

Cross-Compliance

Markets

Residual market instruments(incl. quotas)

Rural development

Competitiveness& innovation

Environment andland management

Quality of life,diversification

Income

Structural

adjustment Public

goods

Limited price support to safety

net levels

25

� Globalisation• the EU must contribute to ensuring global food security, but it must not block the progress of the

emerging agricultural sectors in developing countries.

� Food challenge• research and innovation, progress on yields

� Environmental challenge: • quality of soil and water, biodiversity, climate change

� Economic challenge• strengthen our common risk prevention and crisis management rules. Beyond direct aid, a solid

safety net will also be necessary. New instruments for the excessive fluctuations in incomes.

� Territorial challenge• the future of agriculture and rural areas is intimately linked

� Diversity• as a result of enlargement, the EU has become more diverse.

� Simplicity• the CAP needs to be simple and understandable

Main challenges

26AGRI-L1 Agricultural Policy Analysis and Perspectives 26

The CAP beyond 2013: the debate

Launch of the public debate

Commission Communication

End 2010

Summer 2011

Public conference

12 April 2010

19-20 July 2010

Legalproposals

3 June 2010Advisory group

on CAP

4 questions

2727

Thank you for your attention

AGRI-HORT-COMGES@ec.europa.eu