Flax and hemp grown for fibre

The common market organisation (CMO) for flax and hemp grown for fibre is designed to ensure effective processing of straw and the proper use of Community funds. To achieve this, it takes account of the special features of the various products and producing regions. The CMO for flax and hemp remains in force until 30 June 2008.

ACT

Council Regulation (EC) No 1673/2000 of 17 July 2000 on the common organisation of the markets in flax and hemp grown for fibre [See amending acts].

SUMMARY

From 1 July 2008, products falling within the scope of this Regulation will be covered by the common organisation of agricultural markets.

The CMO for flax and hemp provides for an intervention regime within the framework of the single market and rules on trade with third countries.

Scope

The products concerned are raw or processed - but not spun - flax and hemp, and flax and hemp tow and waste.

Aid scheme

Aid for processing flax and hemp straw into fibre is granted to authorised primary processors on the basis of the quantity of fibre obtained provided that the farmer concludes a contract for the purchase/sale of straw or undertakes to process the straw himself/herself. The aid is also paid where the farmer retains ownership of the straw during processing and proves that he/she is placing the fibre obtained on the market himself/herself.

For long flax fibre, the aid is EUR 160 per tonne of fibre for the 2007/08 marketing year. From the 2008/09 marketing year the aid is EUR 200 per tonne of fibre. For short flax fibre and hemp fibre containing not more than 7.5% impurities, the aid is EUR 90 for the 2007/08 marketing year, but up to the 2007/08 marketing year the Member States may grant aid for those products even where they contain a higher percentage of impurities.

The maximum guaranteed quantity is 80 878 tonnes per marketing year for long flax fibre and 147 265 tonnes per marketing year for short flax fibre and hemp fibre. These quantities are apportioned among the Member States. From the 2008/09 marketing year onwards, only the maximum guaranteed quantities for long flax fibre will continue to be applicable. Any additional production will be ineligible for the aid.

Where production and processing of fibre take place in two different countries, the quantity of product obtained will count against the national guaranteed quantity of the Member State in which harvesting took place.

Additional processing aid is allowed for areas under flax in the Netherlands and in specific areas of Belgium and France for the 2007/2008 marketing year. This aid is EUR 50 or 120 per hectare depending on the production area.

Trade with third countries:

Imports of hemp are subject to the issue of a licence ensuring that:

• the raw hemp and the seeds intended for sowing have a tetrahydrocannabinol content of 0.2% or less;
• hemp seeds not intended for sowing are imported only by importers approved by the Member State.

Charges having an effect equivalent to customs duties and the application of quantitative restrictions or measures of equivalent effect are not allowed in trade with third countries.

Temporary safeguard measures may be taken if the Community market is likely to be disrupted as a result of imports or exports.

Other provisions

Save where the Regulation contains provisions to the contrary, the Treaty rules on state aid apply to flax and hemp grown for fibre.

In implementing the Regulation, the Commission is assisted by a Management Committee for Natural Fibres made up of representatives of the Member States.

Background

The first common market organisation for flax and hemp was introduced in 1970, by Regulation (EEC) No 1308/70.

The major reform of the CAP in 2003 had a profound impact on the flax and hemp sector as regards land use and the grant of regional aid and area payments for arable crops. In 2006 Regulation (EC) No 953/2006 extended the aid for this sector beyond the periods originally provided for under the reform.

The present Regulation is repealed by Regulation (EC) 1234/2007 which sets up a single CMO for 21 sectors.

RELATED ACTS

Implementing rules

Commission Regulation (EC) No 507/2008 of 6 June 2008 laying down detailed rules for the application of Council Regulation (EC) No 1673/2000 on the common organisation of the markets in flax and hemp grown for fibre.

Reports

Report from the Commission to the Council on production trends in the various Member States and the impact of the reform of the common organisation of the market in flax and hemp grown for fibre on the outlets and economic viability of the sector [COM(2003) 701 final – Not published in the Official Journal].

The Commission considers, on the basis of the information gathered, that the arrangements have had clear positive effects on the sector. It concludes, therefore, that no amendments should be made to the existing system of aid before the fuller analysis scheduled for 2005 has been carried out. The option open to Member States to derogate from the limit of 7.5% on impurities has been extended until 2005/06.

Evaluation of the common market organisation for flax and hemp, September 2005 (pdf) (FR).

This evaluation gauges the impact of the 2000 reform, taking account of the sector’s various outlets. As regards fibre production, Community aid has no impact on the overall competitiveness of the final product. According to the report, abolition of the current CMO aid system would not threaten the survival of the European flax and hemp sectors in the short term.The study concludes, however, that the principle of maintaining the aid is justified because a number of destabilising factors have contributed towards a shrinkage of the sector’s economy.

See also

For further details see the legislation on the CMO for flax and hemp.

Last updated: 22.08.2008