APPENDIX 31
Further supplementary memorandum by the
Department of Health (TB 1D)
1. A NOTE ON
THE CAP TOBACCO
REGIME
The Tobacco Regime
The regime was introduced in 1970 to support
production in disadvantaged farming areas, maintain farmers' incomes
and reduce unwanted surpluses by adapting production to varieties
in demand. The Decision of the Council concerning the accession
of the UK to the EEC was taken in 1972. France, Germany, Spain,
Portugal, Belgium, Austria, Italy and Greece are the Member States
which produce tobacco.
The 1992 Reform
After a strongly critical report by the Court
of Auditors in 1987 the Commission appointed a group of consultants
to consider the tobacco regime. Following the consultants' report
the Commission's proposals for reform of the regime were agreed
as part of the CAP reform package in June 1992. The reform aimed
to make the regime more orientated to the market and control production
by:
— a reduced quota system;
— national control agencies for the
main producers;
— a revised payment system;
— abolition of intervention and export
refunds (reintroduction possible under exceptional circumstances).
The reform also provided for:
— a research fund to combat the harmful
effects of tobacco paid for by a one per cent clawback of premia;
— a conversion programme to move away
from certain Greek and Italian varieties.
The 1998 Reform
The regime was further reformed by changes agreed
at the June 1998 Council. The main new elements of the regime
which applied from the 1999 harvest were:
— modulation of premia according to
the quality of tobacco (ie, poor quality tobacco attracts less
subsidy and growers may be driven into the quota buy-back programme—see
below);
— a quota buy-back programme for producers
wishing to leave the sector;
— amendments to premia paid to Belgium,
Germany, France and Austria (but with budget neutrality);
— doubling of clawback to the research
fund (around £13.2 million per annum for projects on the
harmful effects of smoking, less harmful varieties of tobacco,
alternative uses for tobacco, alternative activities for tobacco
farmers and environmental matters).
2. COSTING FOR
NRT ON NHS PRESCRIPTION
Evidence
828,000 smokers tried NRT last year.
25,500 ex-smokers tried NRT last year.
Approximate annual demand for NRT=853,500.
Assumptions
— demand doubles to 1,707,000 people.
— 70 per cent try for just one week.
30 per cent persist and return for further two months prescription.
— 11 per cent are successful after
six months. Half of the rest have a second attempt in the same
year.
Total cost to the NHS=£84 million
This figure represents the estimated cost from
primary care. The figure does not take account of income from
prescription charges, costs of dispensing fees or secondary care
prescribing. The estimate could also be affected by national prescribing
costs of the product. There are of course potential cost savings
from reducing smoking-related diseases, although these are very
hard to quantify.
12 April 2000
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