3 Food distribution to deprived persons
| (31957)
13435/10
COM(10) 486
| Amended draft Council Regulation amending Council Regulations (EC) No 1290/2005 and (EC) No 1234/2007 as regards distribution of food products to the most deprived persons in the Union
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| Legal base | Articles 42 and 43(2) TFEU; co-decision; QMV
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| Department | Environment, Food & Rural Affairs
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| Basis of consideration | Minister's letter of 2 November 2010
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| Previous Committee Report | HC 428-iv (2010-11), chapter 1 (20 October 2010)
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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 | Not cleared; further information awaited
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Background
3.1 In order to avoid a build-up of public intervention stocks,
the Common Agricultural Policy (CAP) has over the years contained
provisions for the subsidised sale of produce to specified outlets.
In particular, a measure[17]
was introduced in 1987, enabling produce in intervention stocks
to be supplied free of charge to designated charitable organisations
for distribution to the most deprived persons in those Member
States which choose to participate.
3.2 According to the Commission, that measure contributed to achieving
two of the objectives of the CAP in the Treaty — to stabilise
markets, and to ensure that supplies reach consumers at reasonable
prices — and has proved to be a reliable supply of food
for the most deprived. It also says that the need for it has increased
following successive enlargements, and as a result of recent rises
in food prices, but it also notes that, with the various reforms
of the CAP, intervention has been removed in some sectors,[18]
whilst for the others it has now been restored to its original
function as a safety net, thereby significantly increasing the
programme's reliance on market purchases.
3.3 It therefore proposed[19]
in September 2008 that the existing Community legislation in this
area should be amended so as to allow food to be sourced either
from intervention stocks or from the market; to provide for the
distribution to take place under an EU plan which would be established
for three years, rather than annually at present; and to enable
co-financing, with the EU making a contribution of 75% for 2010-12
and 50% for 2013-15 (85% and 75% respectively in Member States
eligible for the Cohesion Fund). As our predecessors noted in
their Report of 29 October 2008, the then Government remained
unconvinced as to the merits or appropriateness of the proposal,
believing that the EU should act only where there are clear additional
benefits, and that social measures are a matter for Member States.
They also noted that, although the proposal was being made under
Article 37 of the EU Treaty, the focus of the revised scheme was
more likely to be on the purchase of products on the open market,
and that a number of Member States had questioned the appropriateness
of that Article.
3.4 Since the proposal clearly raised some important issues on
the future scope of the CAP, the appropriateness of EU action
in this area, as well as a lack of clarity over the budgetary
implications, and questions over the proposed legal base, our
predecessors recommended the document for debate in European Committee.
That debate took place on 20 January 2009. They also drew attention
subsequently to a Special Report[20]
(No 6/2009) by the European Court of Auditors on the EU's arrangements
in this area, in which the Court highlighted certain concerns
previously voiced by the UK.
3.5 The Commission brought forward in September 2010 this amended
proposal, which is intended to take into account the powers delegated
to it under the Lisbon Treaty and to reflect some of the views
raised by the European Parliament. However, notwithstanding the
comments by the Court of Auditors, the main aspects of the original
proposal remain unaltered, the only significant changes being
to specify a lower minimum contribution from participating Member
States, and to establish an annual ceiling of €500 million
for the contribution from the EU budget.
3.6 In our Report of 20 October 2010,[21]
we noted that the present Government shares the views of its predecessor,
including in particular reservations over the proposal's appropriateness
on subsidiarity grounds, and over the use of Article 43 TFEU,
given the prospect of purchases being made in future from the
open market. Also, in the light of our role under the Lisbon Treaty
to monitor compliance with the principle of subsidiarity, we asked
the Government to clarify to what extent it objects to this proposal
on the grounds of subsidiarity and to what extent on the grounds
of competence, since this was not clear from its Explanatory Memorandum.
In the meantime, we asked for the Government's response to comment
on our own preliminary analysis, in which we suggested that, where
intervention stocks are relied on for food aid, the Commission
is competent to act under Articles 39(1)(c) and (e) and 43(2)
TFEU (and indeed is better placed to do so than a Member State,
given its role in managing EU intervention stocks), but that,
where the food is sourced from the open market, this legal base
no longer seems to us to be valid, and we went on to question
where the EU gets its competence to act.
Minister's letter of 2 November 2010
3.7 We have now received from Minister of State for Agriculture
and Food at the Department for Environment, Food & Rural Affairs
(Mr Jim Paice) a letter of 2 November 2010, in which he says:
"The Government considers that the use of intervention stocks
for the purposes of this scheme does fall properly within the
scope of Articles 42 and 43(2) of the TFEU, and that the purchase
of foodstuffs on the open market for a limited period where intervention
stocks are temporarily unavailable would also fall within the
scope of these Articles. This is because the purchase of food
on the open market can be said to be necessary in order to ensure
that the scheme, the primary purpose of which is disposal of intervention
stocks, remains viable.
"However, it is far less clear, insofar as this measure involves
the purchase of foodstuffs on the open market in other circumstances
and not merely to address a temporary unavailability of intervention
stocks, that this would fall within the objectives of the Common
Agricultural Policy and, therefore, that Articles 42 and 43(2)
would provide an appropriate legal base for this measure. A number
of Member States share this concern and it is an issue that has
still to be resolved in Council. To that extent, the Government
agrees that the issue of competency remains in doubt. However,
if it is determined that this is a sufficient legal base, the
Government would still have concerns that this measure (insofar
as it does not use intervention stocks) infringes the principle
of subsidiarity. This is because the Government considers that
the provision of aid in these circumstances is essentially a social
measure, more properly and appropriately dealt with by Member
States themselves than at EU level.
"Currently, a small number of Member States share similar
views to the UK and it appears that a blocking minority can be
maintained. In addition, a number of other Member States are concerned
that the funding of a social measure is being proposed from the
agriculture budget. Other Member States that currently participate
in the scheme do not support the inclusion of the co-financing
provision. It is not clear at this stage how this dossier will
be taken forward, but I will keep you updated on progress.
"I hope that this letter will clarify further the nature
of the Government's concerns regarding this proposal and I am
sorry that they were not sufficiently clearly expressed in the
Explanatory Memorandum."
Conclusion
3.8 We are grateful to the Minister for this further explanation,
and we were pleased to see that there is a blocking minority of
Member States which doubt whether the Commission has competence
to purchase foodstuffs on the open market with the intention of
distributing it as food aid within the EU. For reasons we have
already stated, we think it unlikely that the CAP can be used
for this purpose.
3.9 We note that the Minister raises a subsidiarity argument
in parallel, and, whilst we think competence is the primary concern,
we are content to return to the question of subsidiarity once
this is resolved. In the meantime, we are continuing to hold the
document under scrutiny, and look forward to being kept informed
of any significant developments in the negotiations.
17 Council Regulation (EEC) No 3730/87 (OJ No. L 352,
15.12.87, p.1.) This measure was subsequently repealed, and integrated
into Council Regulation (EC) No 1234/2007 (OJ No. L 299, 16.11.07,
p.1.) which consolidated into one instrument existing sectoral
legislation under the CAP. Back
18
Such as olive oil, sugar and maize. Back
19
See (29981) 13195/08: HC 16-xxxiii (2007-08), chapter 1 (29 October
2008). Back
20
See (30962) 13721/09: HC 19-xxix (2008-09), Chapter 7 (28 October
2009). Back
21
See headnote. Back
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