Brussels, Belgium
November 9, 2007
The European Commission today
proposed a revised reform of the support scheme for Cotton. The
new proposal maintains the support arrangements from the current
regime, which was annulled by the European Court of Justice
because of shortcomings in the impact assessment carried out by
the Commission. The proposal foresees that 65 % of the aid
should be "decoupled" (i.e. no longer linked to production) and
35 % remain linked to cotton production, in the form of area
payments. The Court judgment did not question the reform's
approach (i.e. the change of support system) but found that the
Commission had failed to carry out an impact study that included
labour costs in the calculation of production costs, and failed
to assess the effect of the reform on the local ginning
industry. The new proposal follows the completion of an in-depth
impact assessment and a wide-ranging consultation of
stakeholders.
"This proposal maintains the current split between decoupled and
coupled payments, which was working well in the cotton sector,"
said Mariann Fischer Boel, Commissioner for Agriculture and
Rural Development. "This mix is consistent with the aims of the
CAP reforms, giving producers more stable incomes, allowing them
to react to future market developments and ensuring
environmental protection. It also respects the undertaking in
the Greek, Spanish and Portuguese Accession Treaties that the EU
should support cotton production in regions where it is
important for the agricultural economy."
Decoupling means that priority is given to supporting the income
of producers, rather than what they produce. Producers receive
the aid in return for respecting strict standards of
environmental protection, animal welfare and food safety ('cross
compliance') and are free to produce whatever they wish. To be
eligible for coupled aid, cotton can be grown only on land
authorised by the Member State, using authorised varieties of
seed, and the cotton must be harvested under normal growing
conditions. This coupled element has been kept to avoid
abandonment of production.
Under the Single Payment Scheme, national base areas that could
benefit from the coupled aid are established as follows:
- Greece: 370 000 ha
- Spain: 70 000 ha
- Portugal: 360 ha.
The amount of the aid per eligible
hectare shall be in:
- Greece: EUR 594 for
300 000 hectares and EUR 342,85 for the remaining 70 000
hectares
- Spain: EUR 1 039
- Portugal: EUR 556.
Background:
Cotton is an arable crop used both for its seeds, from which oil
and oilseed cakes are made, and mainly for its fibre. The cotton
sector has strong regional importance in the two main producing
Member States. Around 76 % of the EU's total output (about 1.45
million tons of raw cotton) is grown in Greece. In 2005, 9.1 %
of Greece's total agricultural output was cotton while in Spain,
the other main EU producer, cotton contributed 1.3 %. A small
amount of cotton is also grown in Bulgaria; Portugal no longer
grows cotton.
In the EU, most farms growing cotton are characterised by their
small size (Greece 4.5 ha and Spain 11.0 ha) and large number
(79 700 in Greece and 9 500 in Spain). In Greece, cotton
holdings have a higher degree of specialisation; the region of
Thessaly is devoted almost exclusively to cotton production.
Internationally, the EU is a minor player, contributing only
about 2 % to the world's total production of cotton. This
implies that the impact of EU production on the evolution of
world market prices has been negligible. This is further
strengthened by the fact that the EU does not use export
subsidies for this sector and offers duty free access.
Following requests received during the stakeholder consultation,
the Commission will look into the creation of a "label of
origin" to help promote EU cotton. In March 2006, the Commission
committed itself to undertake a review of the rules on the
protection of geographical indications and designations of
origin for agricultural products and foodstuffs. The Commission
will study the possibility of including cotton in the scope of
this Regulation.
The Commission will also analyse the possibility of including
certain cotton products entirely produced and manufactured in
the EU in the list of products eligible for information and
promotion actions and making budgetary resources (at least € 3
million) available for this purpose.
http://ec.europa.eu/agriculture/capreform/cotton/index_en.htm |
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