3. COMMON ORGANISATION OF THE MARKET IN
RICE
(21358)
9439/00
COM(00) 278
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Draft Council Regulation on the common organisation of the market in rice.
Draft Council Regulation amending Regulation (EC) No. 1251/1999 establishing a support system for producers of certain arable crops, in order to include rice.
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| Legal base: | Articles 36 and 37 EC; consultation; qualified majority voting
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| Department: | Environment, Food and Rural Affairs
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| Basis of consideration: | Minister's letter of 24 February 2003
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| Previous Committee Report: | HC 23-xxiv (1999-2000), paragraph 7 (12 July 2000) and HC 23-xxxi (1999-2000), paragraph 8 (29 November 2000)
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| To be discussed in Council: | No longer applicable
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| Committee's assessment: | Politically important
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| Committee's decision: | Cleared
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Background
3.1 The common organisation of the market in rice contains
many of the features associated with the various regimes under
the Common Agricultural Policy (CAP), notably provision for public
intervention, import levies, and export refunds. However, two
main changes have been made in recent years. First, as with the
reforms introduced in 1992 in other arable areas, the intervention
system was weakened, and, in return, producers became eligible
for direct area payments. Secondly, following the GATT Uruguay
Round negotiations, the variable import levies previously in force
were replaced by fixed tariffs, and combined with a ceiling on
the price of imported rice linked to the level of the Community
intervention price.
3.2 Despite this, the Commission considered that the
market was not in balance, with prices well below intervention
price levels. It therefore proposed in June 2000 a number of further
changes, which were set out in our predecessors' Report of 12
July 2000, and which included:
- the abolition of the intervention system, and the provision
instead of a legal basis for private storage, in order to overcome
any market disturbances;
- the inclusion of rice as an eligible crop under the Arable
Area Payments Scheme, together with an increase in the area payment
to the rate agreed for cereals under the Agenda 2000 reforms.
It was also recognised that these changes would have major implications
for rice imports, given the link between ceiling prices and the
intervention price. In particular, were the latter to be abolished,
all rice imports would in principle become subject to the full
fixed tariff, thus increasing import duties by some 30%.
3.3 In their Report, our predecessors raised a number
of points, including the possibility of setting new ceiling prices
for imports which were not directly linked to intervention prices.
These concerns were subsequently addressed in a Supplementary
Explanatory Memorandum of 27 November 2000 from the then Minister
of State at the former Ministry of Agriculture, Fisheries and
Food. Notwithstanding this, our predecessors decided on 29 November
2000 to withhold clearance, not least because they wished, in
the event of the proposals remaining on the table, to see how
their concerns about ceiling prices for imports might be resolved.
Minister's letter of 24 February 2003
3.4 We have now received a letter of 24 February 2003
from the Minister for Food, Farming and Waterways at the Department
for Environment, Food and Rural Affairs (Lord Whitty) pointing
out that the new proposals[13]
on rice which the Commission tabled as part of its mid-term review[14]
of the Agenda 2000 reforms of the CAP — and which were debated
on the Floor of the House on 12 February — supersede those
in this document. In particular, they would retain, albeit at
a considerably reduced level, the intervention arrangements for
rice, and so enable a link to be maintained between these and
the effective duty applied to imports. As such, the new proposals
are strongly supported by the UK.
Conclusion
3.5 Since the current document has now been overtaken
by events, we are clearing it, bearing in mind also that the proposal
now on the table would not give rise to the sort of difficulties
to which our predecessors drew attention.
13
(24234) - ; see HC 63-xi (2002-03), paragraph 1 (5 February 2003). Back
14
(23670) 10879/02; see HC 63-vii (2002-03), paragraph 2 (15 January
2003). Back
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