Brussels, 18/09/2006 (Agence Europe) - Most EU ministers for agriculture gave their support on 18 September to an ambitious reform of the Common Market Organisation (CMO) for wine but asked the European Commission to be less brutal in its grubbing strategy and getting rid of Community market measures. Mixed opinions from Member States on the transfer of funding of the wine sector to rural development programmes to fund social and environmental measures. Discussions on this reform will continue to the end of the year. The Commission will present its legislative proposal for revising the CMO in January or February, in view of reaching an agreement at the Council in the middle of next year under the German presidency.
The Council debate focused on the following elements of the Commission's communication:
Reform scenarios: almost 15 EU Member States: France, Italy, Portugal, Greece, Germany, Austria, Hungary, Finland, Belgium, Sweden, Slovenia, Latvia, Malta and Cyprus selected Option 2 for a “deep-seated” reform, which was judged the most apt for responding to the difficult market situation (overproduction, fall in European wine consumption, high increase in wine imports from third countries etc). However, most countries called on the Commission to review or soften the measures that had been outlined. According to the Commission, this radical option would consist in grubbing 400,00 hectares of vineyards over five years, from 2013 getting rid of the plantation rights system and putting a stop to market management instruments (crisis distillation, distillation of bi-products, distillation of potable sprit, distillation of wines from double variety categories, private storage, fortification or manufacture of grape juice).
Almost all Member States are refusing Option 3: decoupling of direct payments from production levels and the setting up of a single payment, as in many other agricultural sectors reformed in 2003 and 2004. Only the Netherlands and perhaps the Czech Republic support this scenario. The Commission still recognises that decoupling was not desirable for wine, given that the potential amount of decoupled aid would be very low for such permanent crops.
Only a few countries: Spain, Ireland, Netherlands, Luxembourg, Czech Republic and Slovakia appealed for a combination of the radical option and the option of decoupling. Spain said that it would like the radical option on the condition of “profoundly” remodelling instruments.
The most extreme option (rapid liberalisation of the sector) was defended by Denmark.
Grubbing: All countries agreed to acknowledge the usefulness of grubbing some of vines in an effort to sort out the current crisis but most of them criticised the modalities, especially the scale of the Commission's project. The latter has toned down its position somewhat, claiming that grubbing was one of the instruments on offer for rectifying the market and repeated that this measure would be voluntary. Three major producer countries: Spain, Italy and Germany, as well as some “small” producer countries (Portugal, Austria and the Czech Republic) demanded that Member States decide on grubbing, so that geographical distribution was shared out.
Plantation rights: The Commission is proposing to ban the system in 2013. Several Member States: France, Germany, Spain, Austria, Luxembourg and Slovakia have asked for these rights to be preserved after 2013.
Fortification: the Commission is proposing to ban adding sugar to wine in the future. This ban is opposed by Northern countries (and some from the East) in Europe which tolerate this practice: Germany, Austria, Netherlands, Luxembourg, Sweden, Hungary, Czech Republic and Slovakia.
Market management. Wine producing countries and other non-producer countries oppose the suppression of all Community market management measures. Most of them: France, Spain, Italy, Portugal, Germany, United Kingdom, Belgium and Hungary etc want a security net to be kept to help producers plan for manage crises. France believes that the current aid system for distillation should be reformed but that it remains a possible option in national financial frameworks. It also hopes to be make crisis distillation obligatory. Germany wants management measures that improve the market to be kept. Spain, Portugal and Hungary want a gradual elimination of aid for distillation. Italy want to keep distillation measures for bi-products. Only a few countries like Denmark, Austria, Netherlands and the Czech Republic want market measures to be done away with completely.
Rural development/ Almost 10 Member States: France, Italy, Spain, Greece, Germany, Austria, Hungary and Slovakia are opposed to the Commission's proposal to transfer CMO wine funding (market and direct aid) to rural development programmes to finance measures (early retirement, agro-environmental reform) in favour of winegrowing regions, like in the tobacco and cotton sectors. Some countries consider that this should be examined: Netherlands, Luxembourg, Portugal, Czech Republic, Cyprus and Estonia and others support it: United Kingdom, Ireland, Sweden, Belgium and Latvia.