Brussels, 03/07/2007 (Agence Europe) - On Wednesday 4 July, the European Commission adopted its proposal to reform the Common Market Organisation for wine. Two radical measures put forward by the commissioner for agriculture, Mariann Fischer Boel, are likely to meet some heavy opposition in the sector and in most producer countries: grubbing of 200,000 hectares of vines over five years and total liberalisation of planting rights from 2014. The Commission is also proposing to immediately get rid of almost all market management measures (private storage support, export refunds, by-product distillation, support for drinking alcohol, aid for musts used in enrichment) and integrate vineyard areas with single payment per farm (cross-compliance). According to the Commission, the new regulation is expected to apply from 1 August 2008. Agriculture ministers from EU member states will for the first time debate the proposed measures during their next meeting in Brussels on 16 July.
A synthesis of the main changes proposed by the Commission is as follows:
National envelopes. The new CMO will have an annual budget of around €1.3bn (similar to current allocation). A large part of this (from €623 million in 2008-2009 to €830 million from 2014-15) will be made available to producer member states to implement their support programmes. The budget envelope will be made available to each of the wine producer member states, and calculated according to the objective criteria (shares of member states in terms of area, production and historical expenditure).
The measures eligible to these programmes are: new support for promotion in third countries; vineyard restructuring/conversion scheme; green harvest (destruction of immature grapes in an attempt to reduce the plot affected to zero production); insurance funds (assistance to producers who want to protect themselves against fluctuating markets); harvest insurance (aid to safeguard the income of producers when they are affected by natural disasters, climate change, blight or parasites).
Spain will obtain more than 30% of planned Community funding for these programmes (€196 million in 2009, including €38 million for promotion in third countries, and €261 million in 2014), ahead of Italy (26.7 %, €166 million in 2009, €224 million in 2014) and France (23.2 % of the total, €145 million in 2009 and €194 million in 2014). Then come Portugal (€30.7 million in 2009), Romania (€23 million in 2009), Germany (€15.7 million), Bulgaria (€11.9 million in 2009), Hungary (€11.5 million), Greece (€10.4 million in 2009) and Austria (€5.6 million in 2009).
The Commission is also planning to increase funds by €3 million a year for promoting wines benefiting from protected designation of origin or protected geographical indications, as well as other varieties of wine. These funds will also help to finance new EU information campaigns on “moderate and responsible wine consumption”.
Rural development. Several measures could be of interest to the wine sector: setting up of young farmers, investment in technical facilities and marketing improvements, vocational training, agri-environment support, early retirement for farmers who decide to stop all commercial farming activity definitively for the purpose of transferring the holding to other farmers etc. To encourage these measures, the Commission is proposing a transfer of funds between the first pillar of the Common Agricultural Policy (direct aid and market support) and the second pillar, rural development. This funding will be transferred to wine producing regions on the lines of what was done in two other sectors (tobacco and cotton). The allocations will range from €100 million in 2009 to €400 million in 2014.
Liberalisation. The system restricting planting rights, which expires at the end of 2009, will be extended till 2013. Vine plantations will then be “free” as from 1 January 2014. The Commission target is enabling competitive wine producers to “increase their production in order to regain former markets and win new markets in the Union and third countries”. The Commission is, however, expecting that the new market situation and competencies of member states in market access to protected designation and protected geographical designations (designation of areas affected, implementation of maximum yields per hectare and more restrictive rules on production, processing and labelling), combined with the disappearance of the safety embodied by systematic distillation “will limit de facto cultivated surface areas and prevent overproduction”.
Any decision to increase production will therefore be fully dependent upon the ability of producers to find economic outlets for their products, the Commissioner says.
Grubbing. The Commission suggests allocating €430 million in 2008/2009, €287 million in 2009/2010, €184 million in 2010/2011, €110 million in 2011/2012 and €59 million in 2012/2013 for grubbing 200,000 hectares of vineyards over the period of five harvesting years. This 200,000 ha surface area would, the Commission says, correspond to the share of structural surpluses to be eliminated (one year ago, the Commission was counting on making 400,000 ha disappear). The Commission repeats that wine producers will be able to choose whether or not to take part in the grubbing programme. Derogations are foreseen. In order to avoid social and/or environmental problems, member states may: - reduce grubbing to a minimum in vineyards located in mountainous regions or on very steep slopes as well as in regions subject to specific environmental constraints; - interrupt grubbing if the accumulated total surface area of operations reaches 10% of the vineyard area.
Labelling and oenological practice. The Commission suggests simplifying labelling rules in order to meet consumers' needs and ensure greater consistency with wine quality policy. Thus, the proposal establishes a single legal instrument for all wines and, in line with the WTO policy, discards the distinction made between the labelling rules for wine with and without protected designation of origin (PDO) or protected geographical indication (PGI).
On the subject of oenological practice, the proposal provides for transferral to the Commission of the task hitherto allotted to the Council - that of approving the new oenological practices or modifying those which exist (except in the case of enrichment and acidification). The Commission suggests banning the addition of sugar to wine (chaptalisation) and maintaining the EU ban on blending a wine originating from a third country with a European wine, and the blending of wines from different third countries. In order to safeguard the quality of wines, the Commission suggests maintaining the ban on overpressing grapes. (lc)