This document is an excerpt from the EUR-Lex website
Document 52011SC0884
COMMISSION STAFF WORKING PAPER SUMMARY OF THE IMPACT ASSESSMENT
COMMISSION STAFF WORKING PAPER SUMMARY OF THE IMPACT ASSESSMENT
COMMISSION STAFF WORKING PAPER SUMMARY OF THE IMPACT ASSESSMENT
/* SEC/2011/0884 final - COD 2011/0194 */
COMMISSION STAFF WORKING PAPER SUMMARY OF THE IMPACT ASSESSMENT /* SEC/2011/0884 final - COD 2011/0194 */
Executive summary The EU is the first
market in the world for fisheries and aquaculture products - a market worth €55
billion euro (or 12 million tons). On average, EU citizens eat 22 kg of
fisheries and aquaculture products per year, which accounts for 15% of their
protein intake. Consumption patterns vary greatly between Member States,
ranging from barely 10 kg in some countries (mainly Eastern ones) to over 30 kg
in others. All EU countries, however, are registering an increase in
consumption. Because EU production has declined over the last decade, the EU
ratio of self-sufficiency has also decreased sharply: from 57% to 35%. A Common Market
Organisation (CMO) for fisheries and aquaculture products has been in place
since 1970. It is one of the pillars of the Common Fisheries Policy (CFP). Its
current legal basis is Regulation 104/2000, adopted in 1999. The reform of the
Common Fisheries Policy, now ongoing, provides an excellent opportunity to review
and possibly revise objectives and instruments of the Market Policy for fisheries
and aquaculture products. The problems
Since 2008 the
Commission has been carrying out extensive evaluations and consultations, with
the dual intent of assessing the performance of the current legal framework and
the unfolding of EU market trends in the last decade on one hand, and of
hearing the views of the parties concerned on the other. This report presents
and analyses the five main problem areas found, which may be summarized as
follows.
our market policy did not sufficiently contribute to
sustainable production;
the market position of EU production has worsened;
we have been unable to predict or manage market
fluctuations;
our market potential is largely untapped
implementation of the market policy is being held
down by a cumbersome, overly complex framework.
To this day, several EU
fisheries are not exploited in a sustainable way. The market premiums for
sustainable practices are negligible, while there are no market sanctions for unsustainable
or potentially unsustainable practices. Our market policy has failed to get
more value from stagnating or decreasing production volumes, nor has it encouraged
good practices. EU supply is both diverse
and fragmented. In the face of dwindling production and of an increasingly
globalised market, it lacks competitiveness and proved unable to predict and
manage market fluctuations or to adapt to demand in terms of predictability of
volumes or quality and presentation of goods. Lying underneath the five
main problems mentioned, there is also a sub-set of other problems. Fisheries and aquaculture
Producer Organisations (POs), which could play a vital role in day-to-day
implementation of the CFP (as long as their mission, resources and rights and
duties are properly tuned) generally lack the resources and the incentives that
are necessary to organise production efficiently and manage fishing activities,
place production on the market etc. Moreover, if most of the fishing industry
is fragmented, processors and distributors tend to be concentrated,
particularly at the retail end. By developing or encouraging concentration on
the supply end, the economic standing of EU fishermen is likely to be improved.
Better organisation of production appears to be a prerequisite for a well functioning
coordination of all elements along the marketing chain. Information about market
demand, customer preferences, trends, and price formation is not widely
available to all actors. Yet, by better understanding the market dimension of
their activity, EU producers would be better able to direct fishermen toward production
that have a stronger chance of selling at a reasonable price (the golden rule
being here that fish unlikely to be sold should remain in the water). This
means better planning of supplies and sales – in other words actively deciding which
kind of product to sell and when and where to sell it. Policy makers also need
background information – as well as early warning of possible market crises -
for policy design. In the current situation
of overexploited stocks, spending public money to destroy fish is no longer
justifiable; the so-called "withdrawing" of fishery products from the
market should be abolished. The effect of intervention mechanisms on the
stability of the market has been weak anyway, and only limited to a few ports
and some small pelagic species. This is due to the fact
that market interventions may help the symptoms of sudden price drops, but
never attack the cause of the problem. Undeniably, though, fishing remains an
uncertain and risky economic activity; adjusting the timing and quantity of
catches to the specific market needs of any given moment will always be challenging.
Any sensible market policy must account for this intrinsic problem and at least
contain the inherent risks for fishermen. EU marketing standards,
which establish standardised commercial features, are important for the smooth functioning
of the EU internal market for fish. Both the evaluation carried out and this report
analyse to what extent the current common marketing standards should be revised. Consumer information is a
key component of the market organisation, firstly because of the wide range of
fish and seafood now on the shelves and secondly because people are becoming more
and more aware of environmental issues and demand to make informed purchasing
choices. Is this fish fresh or defrosted? Where exactly was it caught? Was it
fished or produced sustainably or traded fairly? Consumers have the right to get
reliable information about what they buy from the label on the product. Finally, increasing consumption
throughout the EU offers tangible economic opportunities for both EU and third-countries
producers. The right for the EU to act According to
Article 3 (1d) of the Treaty of the Functioning of the European Union (TFEU),
the European Union has exclusive competence for the conservation of marine
biological resources under the CFP. Article 4 (2d) TFEU stipulates that the EU
has shared competences for the other components of the CFP. These provisions
determine the scope of action as regards what needs to be addressed at the
level of the EU and what room remains for MS to act. They also affect the form
of EU action in terms of choice of instrument. Market measures under the CMO
fall within the scope of Article 4(2d) TFEU, and justifying the measures with
regard to the subsidiarity principle is therefore necessary. The
establishment of a Market Policy at EU level is essential to achieve an internal
market in fisheries and aquaculture products and to ensure fair competition. Under
the subsidiarity principle, MS and economic operators should enjoy a high
degree of autonomy in the application of different mechanisms pertaining to
Market Policy. Interaction
with the reform of the CFP The main
objective of the reform of the Common Fishery Policy is promoting the sustainable
management of fishery resources through an economically viable sector, which in
turn is to be increasingly empowered with its own management. To achieve this
goal, we must start by helping the sector organise itself more efficiently. The CFP impact
assessment concluded that, considering the new objectives and instruments of
the CFP, a far-reaching reform of the market policy was necessary: market-oriented
instruments should contribute, directly or indirectly, to meeting the main CFP
objectives. To address overfishing
and unsustainable practices and move away from production strategies based solely
on volume, the new market policy will support:
the empowerment
of producers organisations and their co-management of access rights as
well as production and marketing activities;
market
measures that increase the bargaining power of producers (in fisheries and
aquaculture) improve prediction, prevention and management of market crisis
and foster market transparency and efficiency;
market
incentives and premiums for sustainable practices; partnerships for
sustainable production, sourcing and consumption; certification
(ecolabels), promotion, information to consumers;
additional market
measures on discards.
Objectives For each of the
five main problems areas listed above, the impact assessment defines specific
objectives of new market policy for fisheries and aquaculture products:
Upgrading market
incentives to support sustainable production practices
Improving the
market position of EU production
Improving the
connection between EU production and EU market
Enhancing the
market potential of EU products
Supporting
better governance and simplification of the legal framework
Options On the basis of evaluations
conducted, stakeholders views, specific objectives defined and policy tools
identified, four options have been analysed:
Option 1: continuing
the current Common Market Organisation for fisheries and aquaculture
products
Option 2:
revising the current Common Market Organisation for fisheries and
aquaculture products
Option 3: enhancing
the Market Policy for fisheries and aquaculture products
Option 4: deregulating
the current Common Market Organisation for fisheries and aquaculture
products
Option 1 means
that the current CMO remains the same, focusing mainly on market interventions
to support price stability (withdrawal, carry over, private storage, tuna
compensatory allowance), autonomous tariff arrangement (suspensions and
quotas), marketing standards (freshness and size) and mandatory information to
consumers (commercial designation; production method: caught at sea, caught in
freshwater or farmed; origin (catch area or country of origin for freshwater or
farmed products). Option 2 reduces
intervention mechanisms to a single storage aid for fishery products destined
for human consumption. It deals with inconsistencies between minimum landing
and marketing sizes. It makes revision of tariff quotas and autonomous
suspension more flexible (every 3 years). Option 3 is the
same as option 2, but empowering POs and Inter-Branch Organisations (IBOs) with
additional tasks and granting them financial support to draw and implement sustainable
production and marketing plans. This option also simplifies and adapts the
scope of marketing standards; it inserts the respect of international conventions
for fisheries governance in preferential autonomous tariff arrangement; it sets
up a European Market Observatory; it extends mandatory consumer information and
its scope to all products (fresh, frozen, canned, processed). It provides a framework
to ensure accuracy and control of voluntary labelling. Option 4: no
CMO. This option suppresses all financial support (intervention and support to
collective actions) and any specific legal instrument for fisheries and
aquaculture products. No pre-condition for imported fisheries and aquaculture
products. Assessing the options Environmental
sustainability Option 1
remains focused on managing intervention mechanisms; it neither empowers POs to
manage their fishing activities in a sustainable way nor does it ensure that
aquaculture activities are carried out in a sustainable manner. Suppressing aid
for withdrawal in Option 2 will have a rather limited direct impact,
considering the small volumes concerned by withdrawals in recent years. It still
however sends a strong political message that greater anticipation of market
demand and outlets is necessary. Option 3: empowering
POs with collective management, monitoring and control of the fishing
opportunities allocated by the Member States (including the individual fishing
rights and fishing efforts of their own members) would significantly improve the
sustainability of the EU fishing sector. Access for consumers to more precise
information on all products, whatever their presentation will considerably
extend knowledge on fisheries and aquaculture products. This will help
consumers to make better, informed choices and ultimately support responsible
consumption. Lack of support
for POs in Option 4 would negatively affect their coordination in implementing
sustainable fishing practices. It would also limit the management efforts
currently undertaken by POs. Although private initiatives toward sustainable
sourcing and consumption are increasing in the EU, this new market development
still needs to grow and to build up its credibility and confidence. Economic
sustainability Under Option 1,
the added value of POs is bound to remain limited to the possibility of
benefiting from intervention mechanisms. POs are unlikely to provide additional
services to their members, especially to better connect their production to
market requirements and add value to their products. In terms of
impact of Option 2 on first-sale prices, producers are likely to remain price
takers until they learn to group their supply efficiently and better promote
their produce. Regarding Option
3, benchmarking with the fruit and vegetable sector shows a clear correlation
between level of production structuring, price stability and added value. Planning
and concentration of supply should therefore lead to greater first-sale price
stability. Adequate market expertise should reinforce market position and
ability to predict market trends or crises. The increased bargaining power of
producers should lead to more balanced added-value distribution. More accurate consumer
information on origin (for instance on stock, FAO sub-area, defined maritime
spaces such as Bay of Biscay, English Channel etc) will support local purchase
and focus on sustainable consumption. Small-scale fleets would be able to market
their production better; and consumer confidence would be restored or upheld.
Extending the information requirements to processed products would also satisfy
consumer expectations and help prevent fraud. The elimination
of Market Policy instruments as per Option 4 would take away any incentive to
structure the sector. It would weaken the negotiating power of producers and limit
their ability to adapt supply to demand (atomised supply, lack of coordination
between producers). Information to consumers on a voluntary basis is a workable
option, considering operators' commitments to sustainable production. It will
not, however, meet the objective of informing EU consumers better and enhance
their knowledge on fisheries and aquaculture products. Cases were observed in
which false allegations of environmental friendliness have misled or confused
consumers, and this undermines any attempts at restoring the image of the
sector. Social
sustainability In Option 1 and
2, the effects on income will remain very limited, on one hand because they
only concern cases where price drops need to be prevented, and on the other
because the aid intensity is very low (0.2% of EU production value). In Option 3, the
improved structuring of the production side is expected to improve crisis
anticipation and increase added value by diversifying marketing strategies.
This should uphold employment and income levels. In Option 4, the
removal of market instruments is likely to impact some sectors (small pelagic
canneries) that could relocate outside the EU. In these cases, impact on jobs
and income could be substantial on a local scale. Comparing
the options Based on the
impacts assessed and the risks identified, options are compared vis-à-vis the
baseline scenario (status quo) in terms of effectiveness and efficiency in
relation to the objectives and in terms of coherence with overarching EU
objectives (namely the CFP objectives but also other cross-cutting issues).
This can be summarised as follows: Option 1, or
the status quo, was evaluated in detail and was judged partly inefficient and
too complex to fulfil its current objectives. So far the main focus of the CMO has
been price stability through market intervention. This proved to have small impact
and low performance; it tackled the symptoms rather than the real causes, sent the
wrong political signals and left operators with little or no responsibility. Today,
12 years after its adoption, the current CMO appears unfit for the challenges
of the EU market. It will result even more ineffective in the reformed CFP, and
possibly inconsistent with its underlying objectives. Option 2 aims
at correcting the main shortcomings of the existing CMO by proposing adjustments
and simplifications that would improve its functioning. The relevance to the
main objectives of the CFP reform would however remain questionable. Option 4 would remove
the EU Market Policy altogether. It is true that market-driven developments and
incentives toward sustainability have increased; the commitments by processors
and retailers, combined with the increased pressure from NGOs and civil society
to obtain sustainable products, should bring us closer to our environmental objectives.
Still, the main problems identified, namely the complex and fragmented EU
supply sector and the risks of misleading or confused consumer information, would
only be partially addressed. In fact, the industry will be given more
responsibility to manage their activities, but the lack of support to structure
their production and of accompanying market measures would contradict the
reform's goal to support market-based instruments (rather than costly
structural measures) and help producer organisations improve the marketing of
their products. Option 3 proposes
to enhance the Market Policy so as to accompany the fisheries and aquaculture
sector while it shifts toward sustainable production practices. Much can be done
in terms of organisation and marketing to increase predictability of supply and
reduce transactions costs. This option emphasises the role of each main
stakeholder in favouring sustainable practices. Under this option,
the structure and objective of the new Market Policy would be much broader and
bolder:
Several tools, particularly market
interventions mechanisms, are abandoned. This implies a strong political
message and tremendous simplification.
Some elements, such as marketing
standards and autonomous tariff policy, remain but with more flexibility; additional
objectives are introduced (to support the development of distant selling
or e-commerce, a level playing field etc).
Other elements are emphasised: the sector
is reorganised with stronger focus on the producers' ability to manage
their production and market their products; a simplified single storage
aid is foreseen (produce to be stored, processed and reintroduced onto the
market), information to consumers is considerably extended in scope and
content.
One new element is the EU market
observatory.
The impact
assessment of the reform of the CFP concluded that a far-reaching reform of the
Market Policy is necessary, one that should reinforce the role of producer and
inter-branch organisations and marketing measures in general. This will
contribute to the reform's objectives of economic sustainability while also
helping environmental sustainability. The Market Policy should orient production
activities to areas where market conditions are good and where there is a
market for the fisheries and aquaculture products. The Market Policy
should help increase the added value of fisheries and aquaculture products in a
context where financial support is moved away from the fleet (especially scrapping
and temporary cessation), in favour of smart, green, innovative and market-oriented
solutions for the fisheries and aquaculture sector. More specifically, some
aspects of the market reform should accompany and support the implementation of
the new CFP:
Empower POs
to ensure management, enforcement and control of fishing activities of their
members.
Market-based
transferable fishing shares (TFSs) allow the fishing industry to adjust
fleet capacity to the available marine resources without need for public
intervention; POs could be responsible of collectively managing
TFSs.
Market
measures accompanying an active policy for mandatory landing of all
catches for stocks subject to catch limits should be carefully defined and
could be implemented by POs.
Give value to
more selective and sustainable production activities and move away from
strategy based on volume with improved production and marketing planning
by POs and with EU consumers playing a more active role when they are in a
position to make informed choice.
Variations in distributional impacts between areas or regions are
very limited due to a fully uniform access of POs to financial instruments and
the all rules. A broad range
of stakeholders will largely benefit from Option 3. POs' increased
responsibilities and resources will provide new business opportunities to
producers of fishery and aquaculture products, who will find membership more
attractive. The new tariff policy will improve the predictability of supply of
raw materials and this will enable processors to better predict their
activities. The whole sector will be better coordinated and encouraged to
launch initiatives of common interest in particular to promote sustainable
fishing. Consumers will be able to make better informed choices through
improved and more accurate labelling of fishery and aquaculture products.
Finally, the simplification and reduction in administrative burden will have a
positive impact on the Commission, Member States' Administrations and economic
operators. In view of the impact analysis DG MARE supports
Option 3 to set up an enhanced Market Policy for fisheries and aquaculture
products.