Brussels, 27/09/2012 (Agence Europe) - The European Commission was fully in its right to categorise the “contingency plans” applied to the French fruit and vegetable sector between 1992 and 2002 as unlawful State aid incompatible with the common market. The fact that such aid was co-financed by voluntary contributions from associations of the farmers concerned does not preclude its categorisation as State aid, the EU General Court ruled on Thursday 27 September in Cases T-139/09, T-243/09 and T328/09 (see EUROPE 10397).
The aid, which amounts to over €330 million, had been paid during the above period to producer organisations by an operational fund in order to attenuate the effects of temporary excesses in the supply of fruit and vegetables, to regulate the market price and to finance structural measures intended to enable the adaptation of sectors to the market. The fund was managed by approved economic agricultural committees which consist, at the regional level, of farmers' organisations. Between 30% and 50% of the financing of the fund came from farmers' voluntary contributions, but those who did not pay the contribution could not receive aid. The remainder of the financing of the fund came from the Office national interprofessionel des fruits des legumes et de l'horticulture (National Interbranch Office for Fruit, Vegetables and Horticulture), Oniflhor, a public industrial and commercial institution under the supervision of the French State. By decision of 28 February 2009, the Commission had called for the aid to be recovered, deeming it to be unlawful, although it had been partially provided from voluntary producer contributions. The reasons invoked for that were: - aid had not been notified; - producer contributions were not officially voluntary as those concerned were strongly urged to pay them; - contributions were under State control, as they were mixed to public subsidies, fixed by the State, and paid to a committee under State control or allocated to actions defined by the State. On the other hand, France, the Fédération de l'organisation économique fruits et legumes (Fedecom) and Producteurs de legumes de France, have brought actions seeking the annulment of that decision before the General Court, stating that contributions were voluntary, were not available to the State and could therefore not be considered as State aid.
The General Court ruled that the Commission was right, saying that the relevant criterion is not the initial origin of the resources but the degree of intervention of the public authority in the definition of the measures in question and their methods of financing. It states that although the approved economic agricultural committees (see above) had the task of managing the operational funds intended to finance those measures, they did not, however, have any discretion in their application. The State played the predominant role and producers had the power to take part, or not to take part, in the system thus defined by Oniflhor, by accepting or refusing to pay the professional sectoral contributions fixed by the latter. Also, producers failed to state legitimate confidence in the legality of the measures as aid was implemented without prior notification to the Commission.
Welcoming the General Court's ruling in a press release, the Commission plans to resume contact with the French authorities concerning the aid recovery procedure. (FG/transl.jl)