Documents considered by the Committee on 30 April 2014 - European Scrutiny Committee Contents


4 Organic food production

(a)
(35917)

7956/14

+ ADDs 1-5

COM(14) 180

(b)

(35919)

8194/14

COM(14) 179


Draft Regulation on organic production and the labelling of organic products, amending Regulation (EU) No. XXX/XXX [Official Controls Regulation] and repealing Council Regulation (EC) No. 834/2007

Commission Communication: Action Plan for the future of organic production in the European Union

Legal base(a)  Articles 42 and 43(2) TFEU; co-decision; QMV

(b)  —

Documents originated24 March 2014
Deposited in Parliament28 March 2104
DepartmentEnvironment, Food and Rural Affairs
Basis of considerationEM of 8 April 2014
Previous Committee ReportNone; but see footnotes
Discussion in CouncilNo date set
Committee's assessmentPolitically important
Committee's decisionNot cleared; further information awaited

Background

4.1 The requirements, including labelling, which agricultural products and foodstuffs must meet in order to be regarded as organic were first laid down in Council Regulation (EEC) No. 2092/91, but, in the light of a number of significant developments, most notably the increased emphasis on environmentally-friendly production and food, and sustainable development, the Commission put forward in June 2004 a Communication[17] setting out a European Action Plan for organic food and farming. This summarised the impact of organic production and its development, particularly since the 1980s, as well as the factors which had affected these developments, and concluded by proposing a number of actions.

4.2 Following discussion of the Action Plan in the Council in October 2004, the Commission put forward in December 2005 legislative proposals[18] to bring into effect a number of its earlier recommendations, and in the process to provide a simpler, clearer and more transparent Regulation, which contained considerably less detail, and also allowed for a further reduction of detail in the implementing rules. That proposal was subsequently adopted as Council Regulation No. 834/2007, which in particular:

·  defined organic production further by describing its objectives and principles;

·  improved the harmonisation of the organic production rules within the EU, by putting an end to national rules for animal products;

·  introduced the possibility of exceptions to the general rules under the responsibility of Member States, but with strict limitations and for a limited period of time;

·  linked the organic control system to the official food and feed controls system provided for in Regulation (EC) No. 882/2004, and made the accreditation of private control bodies mandatory; and

·  restructured the import regime by extending the recognition of third countries to control bodies active in those countries, and phasing out the previous system under which consignment-by-consignment authorisations were granted by Member States.

The current documents

4.3 The Commission has since carried out a further review of the EU's legislative and policy framework for organic production, in which it sought to target inconsistencies, gaps and ineffective measures, to introduce simpler rules, and to reduce regulatory costs. This has led to the draft Regulation (document (a)), which the Commission says has the aim of taking organic production back to its core principles, and removing the exemptions and derogations provided for in Council Regulation No. 834/2007 (so as to remove obstacles to the sustainable development of organic production; to guarantee fair competition for farmers and operators, and allow the internal market to function more efficiently; and to maintain or improve consumer confidence in organic products).

4.4 More specifically, it would:

·  strengthen and harmonise production rules by removing exceptions (except in "catastrophic circumstances");

·  require organic agricultural holdings to be managed entirely in accordance with the relevant conditions, and the agricultural ingredients used in organic processed products to be exclusively organic;

·  integrate all control-related provisions into the text[19] proposed by the Commission for a Regulation on official controls, thus avoiding the need for those involved to rely on two different texts;

·  remove the option of exempting certain types of retailer currently contained in Regulation (EC) No. 834/2007, which it says has led to different interpretations and made management, supervision and control more difficult;

·  reinforce a risk-based approach to official controls by removing the current requirement for mandatory annual verification of compliance for all operators, and providing through delegated acts that those with a low risk profile should be inspected less than annually (or subjected to reduced annual inspections), leaving higher risk operators to be more closely targeted, and thus providing for a more efficient use of official resources;

·  increase transparency regarding fees for controls, and reinforcing the provisions relating to the publication of operators and information on their certification status;

·  introduce a system of group certification for small-scale farmers, so as to reduce inspection and certification costs and the associated administrative burden;

·  introduce enhanced traceability and fraud prevention;

·  harmonise the action needed when non-authorised products or substances are detected, and enable the Commission to authorise Member States to compensate producers if they are prevented from marketing their products due to the unintentional presence of such substances;

·  set out the action to be taken throughout the EU on the same broad levels of non-compliance so as to ensure a properly functioning internal market, whilst not prejudicing the competence of Member States in determining sanctions; and

·  adapt the trade regime, in particular by replacing the present system of unilateral equivalency by equivalence agreement with third countries.

4.5 These proposals are not due to come into effect until at least 1 July 2017, and, in order to encourage a smooth shift to the new framework, it is accompanied by an Action Plan (document (b)).

4.6 This updates the current position on the EU organic market, and the principal challenges now facing it, notably to expand and respond to demand without putting at risk consumer confidence in the quality of organic products. In particular, it notes the extent to which that confidence can be undermined by too many exceptions to the rules; the extent to which the current rules make participation difficult for small producers; and the need to develop trade in organic products without weakening organic principles or the control system

4.7 Against this background, the Plan focuses on three priorities. First, to increase the competitiveness of organic producers by increasing awareness of, and synergies with, EU instruments targeting organic production (including the new "greening" elements in the Common Agricultural Policy), addressing technical gaps in organic production with research and innovation (and their dissemination), and increasing information on the organic production sector, as well as on the market and trade. Secondly, to consolidate and increase consumer confidence in the European scheme for organic food and farming, as well as trust in imported organic products, particularly as regards the control measures. Thirdly, to reinforce the external dimension of the EU organic production scheme.

4.8 In order to help achieve this, the Plan will involve the publication in 2014 of an information document for organic farmers, processors and retailers, to create greater understanding of the rules applicable to organic production, processing and trade, including the rules applying to conversion as well as other support measures in the CAP. There are also actions aimed at identifying and co-ordinating research needs in relation to the challenges that may result from the future organic production rules, and at assisting the development of trade by means of a new electronic certification system and through analysis of third country markets in order to improve knowledge of potential markets for the EU organic sector.

The Government's view

4.9 In his Explanatory Memorandum of 8 April 2004, the Minister of State for Agriculture and Food (George Eustice) says that the proposal introduces some positive changes for the UK. These include:

·  the risk-based approach to controls so that low risk operators are no longer subject to annual inspections, which could help to reduce costs for compliant operators;

·  the definition of actions to be taken in the event of non-compliance, which should lead to a level playing field across the EU;

·  the new policy on exports, which includes a requirement for equivalence agreements with third countries to be reciprocal, and which should encourage the export of EU organic produce, as some such agreements have in the past been unilateral, facilitating imports but not making it any easier to export to a given third country (though this change may also reduce the attractiveness of equivalence agreements to third countries).

4.10 On the other hand, he says that:

·  the move to a principle-driven approach could make organic production stricter, with a risk that the sector could be disrupted at a time when emerging evidence suggests that some areas of the market, such as online sales, are starting to see a resurgence;

·  the removal of certain derogations (such as allowing the use of non-organic feed in exceptional circumstances) could be costly, since his Department issues a number of derogations for the temporary use of non-organic feed each year (which has been essential in early 2014 with adverse weather conditions, including flooding);

·  the removal of a number of other exceptions, such as the possibility to use non-organic stock, could also have serious implications for some sectors (for example, poultry rearing where organic stock is not currently available), making it necessary for sufficient time to be built into the proposal, to minimise disruption and cost, were these proposals to be eventually adopted;

·  the proposal that holdings must be exclusively organic with no conventional activity taking place on them could stifle entry into the sector, and is likely to have a disproportionate impact on the UK as anecdotal evidence suggests a large number of organic farms also have some conventional farming taking place in parallel: furthermore, although the stated basis for this measure is to reduce the risk of fraud, his Department is unaware of any robust evidence to support such an assertion;

·  the proposal also removes the ability for his Department, acting as the UK Competent Authority, to exempt certain types of retail operation from the need to comply with organic certification requirements where there is evidence that fraud or contamination is unlikely to take place, and this could hamper the ability of some retailers to compete in the organic market and result in unnecessary administrative burdens without any gain for consumers.

4.11 The Minister also points out that the proposal includes the power to use delegated acts in a number of situations to supplement the provisions, including rules covering conversion to organic, as well as the potential to change the overall scope of the Regulation. This could mean that areas other than feed and food are brought within scope through a delegated act, increasing the overall cost burden without sufficient consultation and potentially duplicating national consumer protection legislation and trading legislation. This could, for example, lead to organic textiles and cosmetics coming within scope in the future.

4.12 Finally, he draws attention to the Commission's impact analysis, which suggests that the overall economic, social and environmental impacts over the period 2016-25 are expected to be positive. However, stricter rules and the removal of exceptions could potentially increase producer costs and reduce the number and area of organic farms; although compliant operators are expected to benefit from a move towards a risk-based inspection process, this proposal could increase non-compliance (as there is less likelihood that operators and farmers will be inspected); and the Commission does not expect any savings to be made by the control bodies and national administrations as the control frequency on risk-operators will be increased. Likewise, although the Commission suggests that the environmental impacts of these proposals are expected to be positive, due to stricter rules and the removal of exceptions, this benefit could be offset if the total organic area is reduced as a result of the higher producer costs: and, although a focus on mutual recognition agreements between the EU and third countries has the potential to reduce barriers for exporters, stricter import rules could restrain imports and result in reduced competition.

4.13 The Minister says that his Department has engaged key stakeholders in discussing the proposal, and has collated views on the main issues. It will now produce a summary document, outlining the key changes to the Regulation, and this will form the basis for further discussions with industry focus groups and other stakeholders (including a UK Organic Stakeholder Forum, comprising Defra, the Devolved Administrations, UK Control Bodies, and organic sector representatives).

Conclusion

4.14 These documents represent the latest stage in the development of EU policy on organic farming, and, although they are detailed and somewhat technical, we believe they are likely to be of wider interest, and we are therefore drawing them to the attention of the House. Having said that, the proposals do not strike us as giving rise to any major issues requiring further consideration, but we nevertheless think it would be appropriate to hold them under scrutiny, pending information from the Government on the outcome of its further discussions with industry and others, and of the likely costs and benefits within the UK.


17   (25741) 10436/04; see HC 42-xxvi (2003-04), para 2 (7 July 2004) and HC 38-iv (2004-05), para 7 (19 January 2005). Back

18   (27158) 5101/06: see HC 34-xx (2005-06), chapter 3 (1 March 2006), HC 34-xxxii (2005-06), chapter 3 (21 June 2006) and HC 41-i (2006-07), chapter 8 (22 November 2006). Back

19   (34922) 9464/13: see HC 83-ix (2013-14), chapter 6 (10 July 2013). Back


 
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