Select Committee on European Scrutiny Tenth Report


COM(01) 67

Communication from the Commission to the European Parliament and the Council concerning the special framework of assistance for traditional ACP suppliers of bananas (Council Regulation No 856/1999): Biennial Report from the Commission 2000.
Legal base:
Document originated: 7 February 2001
Forwarded to the Council: 7 February 2001
Deposited in Parliament: 23 February 2001
Department: International Development
Basis of consideration: EM of 8 March 2001
Previous Committee Report: None
To be discussed in Council: No date set
Committee's assessment: Politically important
Committee's decision: Cleared


  13.1  Traditional ACP[17] producers of bananas favoured under the Lomé Convention were given assurances that their access to the European market would be no less favourable in the future. A special system of assistance was put in place to help them to increase their efficiency of production and to adjust to changes in the market. This was replaced in 1999 by a new special framework of assistance (SFA), which the Commission describes as designed to assist them in relation to the new realities of the market.

The Commission document

  13.2  This is the first biennial report by the Commission on the operation of the 1999 SFA. The report includes information on:

  • the legal background to the SFA. It says that twelve ACP countries are eligible for financial and technical assistance. The budget for 1999 is 45 million euros and for 2000 it is 44.5 million;

  • the objectives of the programme, which are to improve the competitiveness of traditional ACP banana production and provide funding for diversification;

  • background on the market. Banana prices vary widely between Latin American supplies, averaging 558 euros per tonne in 1999, an ACP average of 620 euros per tonne and 745 euros per tonne for the Windward Islands;

  • a description of the amended EU regime on banana imports. The Commission is about to adopt a transitional First Come, First Served (FCFS) method of quota management until 2006 when a tariff only system will apply (see paragraph 13.4 below);

  • improving banana competitiveness or funding diversification. According to the report, most beneficiary countries have opted to use the funds for improvements to banana competitiveness instead of for diversification. Only the Windwards have made specific allocations for diversification and social recovery purposes. The Commission is asking ACP countries to reconsider their strategies, with a view to putting more of the SFA finance into diversification; and

  • technical assistance and monitoring. Financial provisions have been made for consultants to support economic and financial analyses, and to monitor progress in recipient countries.

  13.3  No impact assessment has been prepared. The Commission says that it is too early to assess the impact of SFA funds on banana productivity or diversification.

The amended EU regime

  13.4  The Commission describes the outcome of the detailed discussions which took place between interested parties after it put forward its proposal to amend Regulation 404/93, in November 1999. The proposal included a transitional tariff quota system but after months of intensive discussions it became clear that this would be difficult to achieve. In October 2000, the Commission presented a Communication in which it said that it considered that the First Come, First Served (FCFS) method of quota management, proposed in a earlier Communication, was a viable option. The Council will adopt a formal position on this Communication, which it reviewed at the October 2000 General Affairs Council, when the European Parliament has expressed its opinion.

The Government's view

  13.5  The Secretary of State for International Development (the Rt. Hon. Clare Short) comments:

"With regards to the Caribbean, we welcome the SFA and believe that the allocations are sufficient to support industry restructuring and diversification. However, there are bureaucratic obstacles to the effective use of SFA funds and poor communication between the EC and Windward governments is reducing the impact of the programme. Slow progress in deploying the funds effectively has been exacerbated by the reluctance of Windward governments to face up to the likelihood that up to two thirds of existing growers and workers will be made redundant over the next year or so. Planning and project preparation capacity is also very limited in these small islands.

"The UK is working with the EC and the Windward governments to ensure that SFA funds are deployed effectively and reach the most vulnerable producers. Through support to the development of national poverty reduction strategies and our participation in the Eastern Caribbean banana donor group, the UK is actively involved in promoting the development of viable and targeted restructuring, diversification and social support programmes using EU funds."


  13.6  The report, and particularly the Secretary of State's comments on it, highlight the predicament facing the Windward Islands, which have historically found it difficult to devise viable alternatives to banana production. We now clear this document.

17  African, Caribbean and Pacific countries which are signatories to the Lomé Convention and its successor, the ACP-EC Partnership Agreement, known as the Cotonou Agreement. Back

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