Luxembourg, 14/10/2003 (Agence Europe) - On Monday in Luxembourg, Germany, the Netherlands and Denmark underlined the need to foresee a more ambitious reform of the community aid system for cotton producers taking into account the concerns and criticisms expressed over this matter by certain African countries during the WTO Ministerial Conference in Cancun. A position that was not shared by the main producing member states, namely Spain and Greece, which, while criticising the European Commission's proposals on the uncoupling of subsidies, felt that an ending of Community subsidies in the cotton sector would not help the poor countries, given Europe's small share of production in world trade. Furthermore, the Agriculture Council proved generally favourable towards Commission proposals concerning the partial uncoupling of aid to olive oil producers.
During a press conference, the Italian Minister holding the Agriculture Council Presidency, Giovanni Alemanno, confirmed that the talks underlined a wide-ranging consensus over proposals concerning olive oil, even if certain delegations expressed objections over the size of the uncoupling. The talks on cotton were more complex, as certain delegations recalled the criticisms that were issued in Cancun over European subsidies to cotton producers. Commissioner Franz Fischler, who also remarked that a majority of member states were favourable towards an uncoupling of aid in the olive oil sector, but according to a 'flexible and supple' method, noted during the debate that the Commission should on 18 November present legislative proposals concerning cotton, olive oil and tobacco.
Five member states support ambitious reforms
Germany felt that the Commission's proposals are 'fair and reasonable' and recalled that the Europeans had attracted criticism from global public opinion in Cancun due to their aid system for the cotton sector. Referring to the EU initiative intended to take into account the concerns of African countries, Germany indicated the need to examine the future size of Community aid to cotton and assess whether the proposed proportion of aid to be uncoupled (60% uncoupling and 40% of the amounts remaining linked to production) would be sufficient. The Netherlands felt that it would be necessary to continue the reforms launched last June and ensure better access for less developed country products, notably by concretising the EU's undertakings made in Cancun in order to take into account the criticisms of African countries over cotton. They noted a preference for a 100% uncoupling of aid to cotton producers, rather than 60%, and were opposed, as was Sweden, to the Commission proposal aiming to provide a budgetary allocation of EUR 100 million towards rural development in cotton producing regions. Sweden felt that the reform goes in the right direction, but called for a more significant uncoupling in the two sectors. For Denmark, reforms are necessary both in these two sectors as in the tobacco and sugar sector. Agreeing with remarks made by the Netherlands, Denmark underlined that it is necessary to redouble efforts over the Cancun initiative for cotton in order to reduce the negative effects of Community aid. It pushed for an increase in the volume of aid uncoupled from production, which would allow for improved EU relations with its WTO partners. Alongside Sweden and Denmark, the United Kingdom called for an increase in levels of uncoupled aid.
The French Minister, Herve Gaymard felt that it is necessary to take into account the social and territorial factors in Greece and Spain, while trying, at the same time, to help the poorest countries and to support the EU's initiative in Cancun. According to Greece and Spain, the proposal by the four African counties to end Community aid, only affects 2% of world production. With regards to the Commission proposals, Greece felt that it is necessary to foresee a transition period to leave sufficient time for producers to adapt to the new system. Franz Fischler answered that an implementation of the uncoupling in 2005 left sufficient time for such an adaptation. Greece opposed a reduction of its cotton surface area. Spain is in general agreement with the principal of an uncoupling in this sector, but felt that it would be necessary to conserve a sufficient proportion of aid coupled to production in order to avoid the abandonment of areas and lands. According to the Spanish Minister, Miguel Arias Canete, the costs of production in this sector are such that the uncoupling could discourage producers located in Objective 4 zones from continuing this activity. Portugal called for an increase in the surface area eligible to aid, which the Commission is presently refusing.
Although Italy does not produce cotton, it seems to want to join the "block" with Spain, Greece and Portugal. The Italian delegation stressed the fact that progress in production techniques have helped to limit the harmful effects of this crop on the environment.
Austria, not directly affected by these reforms, supported the producing country camp out of "Community solidarity". Austria feels that maintaining employment and production in less-favoured areas should be taken into the equation (a sentiment shared by Finland, even though this State was broadly quite happy with the Commission's proposals).
Importing cheap products would only destroy the European agricultural model, continued the Austrian Minister, who spoke out against total decoupling.
Greater agreement on olive oil
The planned reform in this sector cannot be likened to the decisions taken as part of the June 2003 reform as this is a perennial crop, said Greece. Spain (the largest producer in the world) pointed out that the 1998 reform did not take account of the real level of production in the country.
The Italian delegation asked for an increase from 0.3 to 0.5 hectares for the definition of smallholdings whose aid will be totally decoupled (100ù). Italy indicated its willingness to agree to getting rid of restitutions for the production of certain tinned foods involving pomace oil, but not olive oil.
France agreed with the proposed reforms that tally with the philosophy of the June 2003 reform, as long as only partial decoupling is brought in (as per the Commission's proposal: Ed). France flagged up two problematic points: 1) 3,500 hectares of olive trees, which were planted after 1998, produced fruit in 2003 and will therefore not be taken into account in calculating the single payment, which only uses the 2000/2002 reference period; 2) as most French olive growers have very small yields and do not therefore have farmer status, French producers will not be eligible for aid.