Documents considered by the Committee on 3 November 2010, including the following recommendations for debate: Financial Management - European Scrutiny Committee Contents

3 Food distribution to deprived persons



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

Legal baseArticles 42 and 43(2) TFEU; co-decision; QMV
DepartmentEnvironment, Food & Rural Affairs
Basis of considerationMinister's letter of 2 November 2010
Previous Committee ReportHC 428-iv (2010-11), chapter 1 (20 October 2010)
To be discussed in CouncilNo date set
Committee's assessmentPolitically important
Committee's decisionNot cleared; further information awaited


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."


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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