Brussels, 21/11/2001 (Agence Europe) - The European Commission has endorsed a proposal to set tobacco premiums and quotas. It provides for an extension of the leaf tobacco premiums for the three years 2002, 2003 and 2004 and an update of thresholds resulting in a significant reduction for varieties less in demand. The proposal also includes a significant increase in the levy on tobacco subsidies used to finance reconversion measures for tobacco growers as well as campaigns against tobacco consumption. According to the Commission, the decision sets the scene for allowing the phasing out of subsidies while simultaneously putting in place measures to develop alternative sources of income and economic activity for tobacco workers and growers.
The 10% reduction in the premium for less sought after suncured varieties affects small-scale production (less than 20,000 tonnes in total) in Greece and Italy with the aim of encouraging growers to convert to other varieties or abandon tobacco production altogether through the quota buy-back programme. For the other varieties, the premium has been kept at the same level as for the 2001 harvest but subject to a bigger compulsory contribution to the Tobacco Fund (3% in 2003 and 5% from 2004 onwards)
The guarantee thresholds for the 2002, 2003 and 2004 harvests vary slightly compared with the previous period except for suncured varieties for which a biggest reduction (that first applied in 1999) will apply.
The Commission has also launched a study to evaluate the common market organisation in raw tobacco leading to an assessment of the effects of the Community rules in the raw tobacco sector. The conclusions should be available by the end of 2002. A proposal based on them will be tabled in the first half of 2003 with the aim of scrapping the aid.
Recognising that the Commission's proposal is "relatively reasonable", the Spanish Agriculture Minister, Miguel Arias Cañete, signalled on Tuesday that Spain was preparing a common strategy along with Italy and Greece to defend tobacco production in the European Union.