Brussels, 27/03/2006 (Agence Europe) - On 16 March the European Commission adopted a proposals to extend assistance to flax and hemp producers for two years (2007/08). The Commission considers that it does not have sufficient information on the results of the reforms of 2000 (EUROPE 7761) in this sector and on developments in production in Member States that joined the EU on 1 May 2004.
The proposals also include the maintaining of aid for the long flax fibres at the same level € 160/tonne, as well as aid for short flax fibres and hemp fibres of € 90/tonne National guaranteed quantities have also been extended till 2007/08: 80,823 tonnes for long flax fibres and 146,296 tonnes for short flax fibres and hemp fibres. These amounts are shared between Member States in the form of national guaranteed quantities.
In some cases, Member States are also allowed to allocate aid to long flax fibres containing between 7.5% and 15% of impurities and shives, as well as for hemp fibres that contain between 7.5% and 25% of these impurities and shives. The Commission considers that this system should also be maintained. Similarly, the Commission retains the complementary aid system for companies involved in the initial processing of long flax fibres in certain traditional producer areas: € 120/ha for high yield zones in the Netherlands and western Belgium and € 50/ha for northern France.
Extending the current system in force will also help assess possibilities for simplifying this aid system by incorporating it into the general framework of the 2003 regulation on implementation of the single payment per farm decoupled from production.
The proposal is also accompanied by a report on sector developments:
Flax: the EU total for flax production accounts for more than 20% of surface area used for flax growing world-wide. In 2004 flax cultivation was concentrated in five major producer countries: (65 %), Belgium (15%), Poland (7%), Czech Republic (4.4%) and Netherlands (3.6%). Since 2001 the surface area for flax production has stabilised around 120,000 ha in the EU-25, close to the level before subsidy-driven production practices began (in 1999, the areas sown totalled 233,000 ha), notably in Normandy, Belgium/northern Wallonia (6,500 ha increase). In the Netherlands, flax sown areas increased in limited proportions (500 ha). Before the reform of 2000, many producers received one quarter of the aid per hectare under fibre flax and the remaining 75% was paid to the processor. B As a result of the reform the farmers' share of the subsidies has increased to more than 60%. Producers' incomes have become less dependent on price fluctuations.
Hemp: hemp producing zones are concentrated in six Member States accounting for 90% of the area under hemp in EU-25 in 2004: France (54%), Germany (11%), United Kingdom (9%), Poland (6%), Italy (6%) and Spain (4%). The new Member States account for 11 % of hemp sown areas in the EU-25 (Poland 6%, Hungary 3% and Czech Republic 2 %).
According to a Commission report almost 90% of the total turnover of the € 216.5 million achieved in the flax and hem fibre sector in 2003 came from “textiles”. Special paper and techniques accounted for 8%, “composite materials” for 4% and “non-woven materials” for 1%. Aid for long fibres, combined with the favourable market situation created by strong demand from China has contributed to a “spectacular boom” in flax production, explains the Commission. According to the latter, this increase is linked to the expansion in existing processing capacity with the aid having allowed from investment in equipment, research and promotion.