Brussels, 19/03/2002 (Agence Europe) - The EU's agriculture ministers reached political agreement in the evening of 18 March to extend (from 2002 to 2004) the premium and threshold scheme for tobacco farmers. To achieve this, the Spanish Presidency prepared a compromise proposal preserving most of the aims of Franz Fischler's initial proposal, looking after the interests of tobacco-growing countries and taking into account the concerns of most of the delegations that want to move towards scrapping the aid scheme. Only Denmark and Sweden voted against the compromise (the UK abstained) which they saw as not being ambitious enough in terms of public health and cutting expenditure. Apart from preparing for the informal meeting on Tuesday with the candidate countries (see other articles), the Agriculture Council took note of the Spanish Presidency document on agricultural insurance and the German memorandum on the mid-term review of the Common Agricultural Policy (CAP).
The agreement in Council focuses on two points - 1) "Recital" 5 of the proposal that was sharply criticised by tobacco-growing countries (Greece, Spain, Italy, France, Austria and Portugal) was replaced by an equivalent declaration from the Commission noting that in the framework of the Communication on sustainable development in Europe presented by the Commission to the Gothenburg European Council, there are plans to change the raw tobacco scheme in order to allow a gradual scrapping of subsidies while enabling measures to be introduced to develop new sources of revenue and jobs for farmers. In parallel, the recital was reworded to not only mention the measures under Article 152 of the Treaty on public health protection targets, but also the new responsibilities of the Community Tobacco Fund (initiatives to convert tobacco farms to other crops); 2) increasing the amount deduced from the premiums to finance the Fund from 2% in 2002 to 3% in 2003 (as the Commission suggested) and 5% in 2004, depending on the results of a report the Commission will publish before 31 December 2003. The Presidency compromise answers the requests made by Italy (more flexibility in the bidding scheme to enable farmers' groups to decide whether or not to join the scheme) and Belgium (supported by Greece) in terms of keeping the option of setting up a national quota system.
The main technical aspects of the initial proposal were approved - extending for three years the current levels of premiums and thresholds for the different varieties of tobacco (apart from a reduction for the V variety which is difficult to sell and a change to the threshold levels of the other four varieties); replacing the Community Tobacco Fund's initial responsibility of carrying out research into less dangerous tobacco to a public information initiatives to explain the dangers of tobacco and initiatives to help tobacco farmers concert to other economic activities that can create jobs.
Mr Byrne sees tobacco subsidies coming to an end
Commissioner David Byrne was not particularly delighted with the compromise, but said at a press conference that the Commission's declaration in the minutes of the Council clearly showed that the "days of tobacco subsidies are numbered". The first step has been taken, he said, commenting that discussions on the future of tobacco farming would take place at the beginning of 2003 in the light of the report the Commission will prepare on the social and economic impact of scrapping the aid scheme. Mr Byrne said that the money available to the Community Tobacco Fund for information campaigns about the dangers of smoking could have been higher, but they were considerable nevertheless. The Fund will have a budget of EUR 15 million this year, followed by EUR 20 million in 2003 and maybe EUR 30 million in 2004. A campaign to raise awareness of the dangers of tobacco (for which a large sum of money has been earmarked) will be launched on 18 May, explained Mr Byrne.
The Agriculture Council also examined the following issues:
Agricultural insurance. The agriculture ministers took note with some interest of a memorandum from the Spanish Presidency recommending a Community risk management strategy to facilitate the development of agricultural insurance schemes in Member States (see EUROPE of 27 February, p.14à. The question will be raised at an international conference in Madrid on 13/14 May on agricultural risks. In the light of the conference conclusions and contributions the delegations may decide to make, the Presidency will provide ministers with a draft conclusion at the June Agriculture Council.
Mid-term review of the CAP. The German minister Renate Künast presented her country's views on the mid-term review of Agenda 2000. Germany favours a gradual cut in all direct aid and re-orienting some of the savings towards rural development (see EUROPE of 27 February, p.14). At a press conference Ms Künast said the mid-term review of the CAP should be used to make real changes Sectors that are not functioning properly and problems of compatibility with WTO rules should be examined, was the main message of her statements, and big changes should be introduced before 2006. The new French agriculture minister François Patriat displayed a willingness to listen to some of his German counterparts ideas, saying he favoured the principle (which would become compulsory) of adjusting direct aid, as long as common rules were defined. He did not see any problems with increasing money for the second pillar (rural development) as long as this did not cause imbalance in the common organisations of the markets and did not prevent an effective first pillar from being maintained. Mr Patriat noted that a co-funding problem would arise for rural development funds. He said that attention should also be paid to degression (cutting aid to made savings) and applying ceilings to aid (two topics the Germans are particularly keen on). He said the idea of unlinking aid (separating it off from production requirements) could be decided upon, as long as it was properly targeted.
Spain called for the Commission to take measures to indemnify farmers whose olive groves were damaged in January by frost, and Germany raised the issue of guarantees provided by non-EU countries in terms of monitoring residues in food. Mr Patriat also drew the Commission and Council's attention to the deterioration of cereal markets in France, stressing the dangers posed by the serious increase in wheat imports, the marked fall in wheat prices on the French market and the fall in exports. This year is expected to yield a bumper harvest, which means the situation is likely to continue its downward spiral, added Mr Patriat. Franz Fischler mentioned the sharp rise in wheat available from central and east European countries caused especially by reduced transport costs. He pointed out that the Community had imported 500,000 tonnes of wheat from the US.