Opinion of the Economic and Social Committee on the "Report from the Commission to the Council on the state of implementation of Regulation (EC) No 2200/96 on the common organisation of the market in fruit and vegetables"

(2001/C 221/13)

On 27 February 2001 the Economic and Social Committee decided to issue an additional opinion, under Rule 23(2) of its Rules of Procedure, on the above-mentioned report.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on this subject, adopted its opinion on 10 May 2001. The rapporteur was Mr de las Heras Cabañas.

At its 382nd plenary session (meeting of 30 May 2001), the Economic and Social Committee adopted the following opinion by 107 votes to one, with four abstentions.

1. Introduction

1.1. In 1996 the common market organisation for fruit and vegetables underwent extensive reform. When the Council approved the above Regulation, it stipulated that the new system would be assessed after a period of four years. In January 2001 the Commission therefore presented a report on the implementation of this Regulation to the Council.

1.2. Two months before this report was presented, the Council adopted as a matter of urgency a proposal by the European Commission to make a number of changes to the common market organisation for fruit and vegetables, the aid scheme for processed fruit and vegetables and the aid scheme for producers of certain citrus fruits. The Committee has already expressed its views on this proposal in its opinion(1) of 19 October 2000.

1.3. In its opinion, the Committee requested that this report be accompanied by additional proposals or at least guidelines concerning a number of essential points it had failed to address and suggested that the following points, among others, be looked into:

- need to improve knowledge of production and markets;

- improvement of quality standards for fruit and vegetables, and monitoring;

- obstacles to the development of producer organisations and to improvements in their effectiveness. Need to encourage producer organisations to merge and form associations;

- operation of producer organisations' operational funds and programmes, and dovetailing of these with rural development measures. Assessment of the extent to which the aims of improving quality, respect for the environment and food safety have been achieved;

- possibility of harmonising the criteria for environmental measures under the operational programmes;

- operation of the intervention system and assessment of the need to reinstate the concept of "serious crisis";

- trade and respect for Community preference;

- specific measures needed for products facing stiff international competition. Long-term solution of the problem of shell fruits and carob beans and support for certain processed fruit and vegetables.

1.4. Because some of these suggestions are only described in the report, no conclusions can be drawn concerning what future guidelines should be examined. The report also fails to address a considerable number of issues raised by the Committee in its October opinion. The Committee has therefore taken the initiative of drawing up this additional opinion in order to take a more in-depth look at necessary future guidelines, as discussed below.

2. General comments

2.1. The Committee acknowledges the Commission's efforts to offer as comprehensive an overview as possible of the way in which the common market organisation in fruit and vegetables works. It also welcomes the fact that the report contains a number of proposals and raises questions concerning future guidelines for marketing standards and the development of producer organisations and interbranch organisations. The Committee also realises that it is difficult to assess some aspects of the report when it does not have sufficient data.

2.2. However, the report fails to address many real issues in the sector and is therefore unlikely to meet its objective of guiding discussions and proposals aimed at improving the common market organisation. Its analysis of crucial areas is insufficient and it does not take a sufficiently in-depth look at factors that have prevented a bigger increase in the concentration of supply, better use of operational funds and greater efficiency in using budget resources.

2.3. A number of essential aspects for the fruit and vegetable sector should be included in the report, such as, the opening-up of markets to imports from third countries following the GATT agreements, the weakening of Community preference in recent years and plant health-related barriers to EU exports. The report should also have looked ahead to the potential impact of a further liberalisation of trade in agricultural products agreed at the WTO, concessions made under trade agreements between the EU and third countries, the establishment of free trade areas and EU enlargement.

2.4. The report also needs to analyse problems with border protection mechanisms, such as insufficient Community tariffs for certain products, restrictions on the proper implementation of entry prices, the inefficiency of the special safeguard clause and the application of import certificates.

2.5. Likewise, account must be taken of the complexity of fruit and vegetable policy at international level due to the problems it raises for third countries with regard to sustainable development, food safety and respect for fundamental rights. Guarantees are therefore needed that fruit and vegetables imported into the EU have been produced under proper conditions so as to ensure that due respect is paid to human dignity, the social rights of producers and workers, and the environment in producer countries.

2.6. The Committee notes that the report fails to analyse the situation of processed fruit and vegetables despite the growing importance of this sector (which accounts for more than a third of production) and despite the vital role played by the processing industry in keeping people, jobs and economic activity in producer regions. Given that certain processed fruits and vegetables, such as tinned asparagus, apricots and cherries, are in a critical situation in the face of international competition, the Committee recommends that the effectiveness of current support measures for processed products be examined in greater detail and, if relevant, that these products be included under the rules of the common market organisation for the fruit and vegetable sector.

2.7. The Committee also draws the Commission's attention to the need to develop a Community policy to encourage setting up schemes to insure fruits and vegetables against natural catastrophes, while respecting the systems which already exist in some Member States.

2.8. The Committee would like to point out that the fruit and vegetable sector is currently in a delicate situation due to labour shortages and social problems caused by the surge in immigration in producer regions. Measures therefore need to be taken to regularise and improve the situation of immigrants working in the sector. There is an urgent need for public authorities to draw up policies for the social integration and employment of such workers and consideration should also be given to administrative and tax measures to encourage seasonal work.

2.9. The Committee notes that the fruit and vegetables sector still has to contend with a structurally unbalanced market. In addition it is a fact that the consumption of fruit and vegetables in some Member States is far less than it should be from the point of view of public health. The Committee therefore believes that greater budgetary support is needed for organising information and promotion campaigns for fruit and vegetables in both the horizontal regulations and the common market organisation. Existing restrictions should therefore be eliminated and growers' organisations encouraged to use the money available in the CMO budget for promotion and information.

3. Specific comments

3.1. Marketing standards

3.1.1. The Committee reiterates its call for improvements in the quality and variety of fruit and vegetables sold. Consumers now demand more information about their organoleptic qualities, nutritional value, origin and production methods used etc. so they can make a more informed choice, and greater guarantees regarding food safety and respect for the environment. Recognition also needs to be given to producers' efforts to adjust to market needs and to their contribution towards protecting the rural environment.

3.1.2. The Committee welcomes the existence of quality criteria in the distribution sector that are adapted to regulations currently in force, but is concerned by the proliferation of fruit and vegetable quality labelling systems which incorporate environmental values, as these can lead to confusion among consumers. It also raises a number of questions concerning the criteria imposed on producers by the distribution sector, especially as it is unclear whether they are the same for all producers.

3.1.3. Quality standards should be maintained and developed as they are a necessary tool for market transparency and better trade relations, and provide the consumer with useful information when choosing products. The Committee is also in favour of maintaining the possibility of using standards to manage serious market crises.

3.2. Producer organisations (POs)

3.2.1. Producer organisations are still the cornerstone of the common market organisation for fruit and vegetables and yet the report notes that the 1996 reform has not met its objectives of organising and grouping supply, and improving the efficiency of POs in response to increasingly concentrated distribution. An analysis is therefore needed of existing obstacles in producer regions and possible incentives through specific programmes to encourage small farmers to join POs voluntarily, thus increasing their size. Incentives are needed to encourage the setting-up of and cooperation between POs, and to encourage POs to merge and form associations.

3.2.2. Other aspects that should be analysed to provide incentives for forming and joining associations include the suitability of recognition criteria and the involvement of producers in running and monitoring POs.

3.3. Interbranch organisations and agreements

3.3.1. The Committee agrees with the Commission that existing restrictions could be reduced to allow interbranch agreements to be implemented with greater efficiency and ease, providing they do not alter the conditions of free competition in the market.

3.4. Intervention arrangements

3.4.1. Changes to intervention arrangements have led to a significant fall in the number of products being withdrawn from the market. However, it has also become clear that such withdrawal mechanisms are unsuited to deal with certain crises. The Committee therefore proposes a study into the viability of reinstating the concept of "serious crisis" to regulate the market in the event of short-term surpluses of certain products, primarily summer fruits.

3.4.2. A lack of awareness of the realities of production leads to structural surpluses. Additional measures are needed to alleviate this problem and help scale and restructure production so it can adapt to the reality of the market.

3.5. Operational funds and their utilisation

3.5.1. Despite a number of recent reforms to offer POs greater security with regard to the level of support granted to operational funds and the fact that operational fund implementation procedures have been simplified, no mention is made of this in the report. However, the Committee thinks that greater consideration needs to be given to making procedures for contributing to operational funds more flexible and to simplifying procedures for presenting and managing operational and monitoring programmes in order to qualify for operational fund support. A clearer definition is also needed of the nature and functioning of POs as recipients of such aid, as mentioned in point 3.2.2.

3.5.2. The Committee is also concerned that the Commission does not possess more detailed information on the nature of the actions carried out under the operational programmes as this could offer guidelines for improving the efficiency with which funds earmarked for such programmes are used.

3.5.3. Consideration should be given to increasing public participation in the aforementioned funds according to a number of specific criteria, such as, the economic dimension of associated producers, the need for greater regional organisation and the low profitability of certain products due to structural crises. Consideration could also be given to actions undertaken in connection with cooperation between POs and mergers between POs and their associations. This should all help to improve the organisation of supply.

3.6. Eco-conditionality

3.6.1. The 1996 reform of the common market organisation for fruit and vegetables sought to include environmental protection in actions undertaken by POs. However, the Committee points out that the report only briefly touches on this and recommends an in-depth study into the use of scarce natural resources, in particular non-renewable energy and the use of water in arid regions, and in general the environmental impact of fruit and vegetable production on nature.

3.6.2. The Committee stresses the need to move as quickly as possible towards more ecological production methods for fruit and vegetables providing that due consideration is given to their economic impact on both producers and consumers. The Committee realises that this will only be possible if products imported from third countries are subject to the same requirements.

3.7. The case of nuts

3.7.1. The Commission report highlights the poor competitiveness of the nut and carob bean sector due to imports from third countries and this sector's importance in containing depopulation and desertification in vast rural areas of the Mediterranean. However, the socio-economic dimension, the lack of alternatives and the jobs created by this sector locally should have been studied in greater depth.

3.7.2. Most of the ten-year plans for improving the quality and marketing of nuts and carob beans expire in 2001. This puts nut producers in an unsustainable position and leads to crops being abandoned as common market organisation or rural development measures are either insufficient or unsuited to this sector's particular situation. Analyses of what sustaining the sector has cost and is costing the EU should look beyond mere economics, given the strategic role played by the European sector in international trade in these products.

3.7.3. Given the current crisis in this sector, the Committee therefore regrets that the report does not offer the option of implementing stable agricultural policy measures to help the sector survive and reiterates the need to offer income support, as already mooted in previous ESC opinions(2).

3.8. Citrus processing aid

3.8.1. The Committee agrees with the Commission that the new system has proved its validity in most citrus-growing regions, and that processed quantities have remained stable and the industrial fabric has been maintained. However, it considers that the results of its implementation have not been as satisfactory due to the fact that thresholds are not in tune with market trends, and the adverse impact of aid penalties on producer incomes and the complexity and bureaucracy of procedures for implementing the system.

3.8.2. The Commission's analysis of the implementation of mechanisms for citrus-fruit processing fails to explain the reasons behind the recently approved reform, such as the increasing production of and demand for juice and the fact that higher aid penalties encouraged citrus fruits to be withdrawn. This makes the report less coherent.

3.9. Coexistence of the fruit and vegetable regime and rural development measures

3.9.1. Given the efforts needed by the sector to adapt swiftly to market trends, common market organisation measures need to continue to dovetail with rural development measures so that POs can use both sources of funding effectively and coherently. Checks to prevent one action receiving two sources of funding must not restrict potential funding for structural improvements.

3.10. Budgetary issues

3.10.1. The Committee believes a more detailed and extensive analysis is needed of all common market organisation financing in order to properly assess spending and how well it responds to the sector's needs. The conclusions drawn can then be used to draw up guidelines to ensure that available resources are used more effectively.

3.11. National and Community checks

3.11.1. The report refers to checks carried out by the European Commission's special corps of inspectors on the implementation of marketing standards by Member States. Given the contribution these standards make to transparency in the market, the Committee believes the results of these checks need to be made public.

4. Conclusions

4.1. The Committee acknowledges the Commission's efforts to describe the current situation of the sector and considers the report acceptable as an information document. However, it questions its usefulness as the basis for a coherent discussion of the sector's problems and for possible legislation to improve the common market organisation for fruit and vegetables. The Committee also believes that a more detailed and extensive analysis should have been carried out of issues in this sector and suggestions put forward for solving them.

4.2. The Committee urges the European Parliament and the Council to broaden their discussion beyond the content of the report and calls on the Commission to present short-term proposals to adapt the common market organisation, based on the guidelines set out in this opinion.

Brussels, 30 May 2001.

The President

of the Economic and Social Committee

Göke Frerichs

(1) OJ C 14, 16.1.2001 (amendment of Regulations 2200, 2201 and 2202)

(2) OJ C 14, 16.1.2001 - OJ C 116, 20.4.2001.