Mainz, 21/05/2007 (Agence Europe) - Speaking on Sunday 20 May in Mainz, Germany, Mariann Fischer Boel, Agriculture Commissioner, revealed the broad lines of the legislative reform proposal for the wine sector to be adopted by the European Commission on 4 July. On the sidelines of the informal meeting of EU member state agriculture ministers, Ms Fischer Boel announced that she would recommend a more modest objective with regard to grubbing and the addition of sugar (chaptalisation) to enhance the alcohol content of wines. Furthermore, the Commission plans to considerably increase the funding allocated to the promotion of European wines in third countries.
Grubbing programme. In its communication of June 2006, the Commission had suggested voluntary grubbing of 400,000 hectares of EU vineyards during five years, i.e. 12% of all surface areas planted. Given the opposition expressed by member states to this massive grubbing programme and the slight improvement of the market situation in 2006, the Commission will be suggesting a more modest objective of 200,000 hectares of vineyard to be pulled up from 2009 to 2013 (five years), Ms Fischer Boel said.
According to the project now doing the rounds in various Commission services, the premium paid to farmers that accept grubbing would be over €7,000 per hectare in 2009 and would fall to just under €3,000/hectare in 2013, at the end of the programme. A Community budget of just over one billion euros over five years would be earmarked for grubbing, that is, half as much as the allocation initially foreseen (in June 2006) for 400,000 hectares. “These budgetary consequences would make it possible to improve other measures”, the Commissioner stressed, promising to considerably increase the allocation to promote exports of European wines to third countries. According to some sources, the funding earmarked for promotional action would be €120 million annually.
Single farm payment. Another new feature compared to the initial communication of June 2006 is that all working vineyards would be eligible for the single payment scheme (subsidies irrespective of the level of production). Land from which vineyards have been pulled up would also be eligible. The regional average for uncoupled direct payment would have a ceiling of €350 per hectare.
National allocations. The Commission maintains its proposal to also grant member states national funding for financing the following measures: - restructuring and conversion of vineyards; - promotion of exports to third countries; - early harvesting; - and the creation of mutual funds and income risk insurance to counter risks caused by natural disasters. Between 14 and 20% (depending on the years) of these national allocations would be used for measures to promote European Union wines in third countries (50% funded by the Community budget). The total amount of national budgets would vary between €620 and 860 million annually.
Management instruments. The Commission will restate its readiness to do away with market management instruments (crisis distillation and by-products, distillation for drinking alcohol, private storage …).
Planting rights. Ms Fischer Boel continues to recommend gradual liberalisation of the wine sector. The ban on granting new planning rights would remain in place until 31 December 2013, when it would be lifted to allow competitive producers to respond freely to market conditions.
Wine-making practices. According to the commissioner for agriculture, the “final proposition on wine reform obviously will include that we will exclude the possibility to use sugar in wine production in Europe”, to increase the percentage of alcohol in wines. Chaptalisation is defended by certain countries of northern and eastern Europe (Germany, Austria, Netherlands, Luxembourg, Hungary and Czech Republic). The Commission nonetheless maintains its idea to also do away with subsidies for must used for wine enrichment (such financial support cost €200 million in 2006, the Commission pointed out).
At the request of a majority of member states, the Commission no longer plans to lift the ban on vinification of imported must and the blending of EU and third country wines. In its June 2006 communication, the Commission had hinted that it should authorise these oenological practices as they are allowed at international level. Ms Fischer Boel explained, however, that she agreed to take the risk of possible WTO complaints against the EU's decision not to accept such practices.
Rural development. The Commission will still be proposing to transfer a small part of first pillar funding (direct aid and market measures) to rural development funds. €100 to 400 million would thus be made available annually for an early retirement scheme (€18,000 annually at most per farmer) and for agri-environmental programmes (€900/hectare). (lc)