8 Common Agricultural Policy: reform of
the tobacco, olive oil and cotton sectors
| (25077)
14991/03
COM(03) 698
| Draft Council Regulation amending Regulation (EC) No. 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers.
Draft Council Regulation on the common organisation of the market in olive oil and table olives and amending Regulation (EEC) No. 827/68.
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| Legal base | Article 37 EC; consultation; QMV
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| Document originated | 24 November 2003
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| Deposited in Parliament | 25 November 2003
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| Department | Environment, Food and Rural Affairs
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| Basis of consideration | EM of 4 December 2003
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| Previous Committee Report | None, but see footnote
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| To be discussed in Council | No date set
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| Committee's assessment | Politically important
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| Committee's decision | Cleared, but relevant to the debate already recommended on the Commission Communication
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Background
8.1 In June 2003, the Agriculture Council agreed the mid-term
reform of the Common Agricultural Policy (CAP) for the three main
"northern" sectors (beef, milk and arable crops), a
process which the Commission says effectively rounded off for
those commodities the move away from product to producer support
begun in 1992. At the same time, the Commission was invited to
submit in the autumn a Communication on the reform of three "Mediterranean"
commodities — tobacco, olive oil and cotton — based
on the same underlying approach of a single farm payment which
cuts the link between production and eligibility for subsidy.
8.2 In September 2003, the Commission responded
to that request in a Communication,[35]
which also set out a number of policy options for sugar, the one
major area of the CAP yet to be reformed. As we noted in our
Report of 29 October 2003, the sugar regime differs from the other
areas dealt with in the document in that, on the one hand, there
are substantial (and direct) UK interests involved, whilst, on
the other, the Commission had sought simply to present a range
of options, with the intention of producing a more specific proposal
in due course. We therefore commented that there was a case for
clearing the document, and returning to the subject when the formal
proposals are available.
8.3 However, we also said that, before we felt able
to take a view on this, we required clarification about the impact
of the Everything But Arms (EBA) Agreement, which provides preferential
access for produce, including sugar, from the least-developed
countries (LDCs). Despite the lengthy explanation provided in
a supplementary Explanatory Memorandum of 20 November 2003 from
the Parliamentary Under-Secretary of State (Farming, Foods and
Sustainable Energy) at the Department for Environment, Food and
Rural Affairs (Lord Whitty), we concluded in our Report of 3 December
2003 that this matter should be debated in European Standing Committee
A. We also commented that, although we expected sugar to be the
main focus of that debate, it would of course also provide Members
with the opportunity to raise points on the reforms proposed by
the Commission for tobacco, olive oil and cotton.
The current proposal
8.4 The current document contains two legislative
proposals arising from the Commission's earlier Communication.
The first would amend Regulation (EC) No. 1782/2003[36]
(which establishes the new single payment scheme under the CAP),
so as to include the changes envisaged for tobacco, olive oil
and cotton (summarised in paragraph 2.9 of our Report of 29 October
2003). The proposal would thus involve:
- for tobacco, a decoupling
in stages over three years, at the end of which most of the aid
would have been transferred to the single farm payment, with the
balance devoted to setting up a financial envelope within the
second pillar of the CAP for restructuring tobacco-producing areas;
- in the case of olive oil, the conversion
of the existing production-linked payments into the single payment,
except that, for holdings larger than 0.3 hectares, only 60% of
the existing payments would be converted, with Member States retaining
the remaining 40% in order to grant producers an additional olive
grove payment, calculated on a per hectare or per tree basis,
and intended to maintain the trees, thus preserving the local
landscape and meeting environmental, social and cultural concerns;
- 60% of aid to cotton producers being transferred
to the single payment, with the remaining 40% being retained by
Member States as a new per hectare payment, subject to an upper
limit on the area receiving aid.
8.5 The second part of the proposal arises because
the existing Regulation (No. 136/66/EEC) which establishes the
common organisation of the market in oils and fats —
and which thus covers not only olive oil and table oils, but also
oilseeds, oil cakes and other vegetable oils —
is due to expire on 1 November 2004. Certain elements in that
Regulation have been, or are to be, incorporated in Regulation
(EC) No. 1782/2003, and the purpose of this proposal is to provide
a new legislative basis for the remaining elements.
Conclusion
8.6 As we noted in our earlier Reports, the UK
does not produce cotton, olive oil or tobacco, and the Government
is generally content with what has been proposed in these three
areas. Also, as we have noted above, the proposal would essentially
do no more than give legislative effect to the thinking set out
in the earlier Communication. However, since it is clearly relevant
to the debate which we have recommended on that document, we think
it right, in clearing it, to draw it to the attention of the House.
35 (24905) 12965/03; see HC 63-xxxv (2002-03), paragraph
2 (29 October 2003) and HC 42-i (2003-04), paragraph 3 (3 December
2003). Back
36
OJ No. L.270, 21.10.2003, p.1. Back
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