Technical Assistance for Development of a Strategy for Alignment with Common Market Organisation (CMO) Requirements TR2014/AG/10-A1-01/001 This Project is co-financed by the European Union and the Republic of Turkey II. PRESENTATION OF SELECTED CMO SCHEMES: Intervention measures; aid schemes; vine plantings; sugar; state aid Antalya, 1st March, 2018

Contents Market intervention measures: Aid schemes Public intervention Aid for private storage Aid schemes School schemes Support in the olive sector Aid in the fruit and vegetables sector Support in the wine sector Aid in the apiculture sector Authorisation for vine plantings Specific provisions in the sugar sector Provisions on state aid

Intervention measures: Introduction Articles 8 - 21 of the ‘umbrella’ CMO Regulation 1308/13 Objective: support to sectors in cases of market disturbances Achievement of the objective: Removal of certain quantities of products from the market by buying-in by the Paying Agency (public intervention) or support to producers who store their products (private storage aid) Selling of stored products on the market Preconditions for implementation: Price monitoring system must exist Reference prices must be established in advance System for implementation must be established by the Paying Agency

Public intervention Eligible products: wheat, barley, maize, rice, bovine meat, butter, skimmed milk powder Two types of intervention: at fixed price (wheat, butter and milk powder): intervetion buying-in is done during intervention period regardless of the market situation for fixed quantities (wheat 3 million tons, butter 30,000 tons, milk powder 190,000* thousand tons) by tender: in cases of market disturbance Discharge of stored products from intervention: mostly through sales by tender; distribution to the poor is possible * For 2018 the buying-in of milk powder at fixed price is suspended because of large quantities (almost 400 thousand tons) in intervention storage!

Private storage aid Eligible products: sugar, olive oil, flax, bovine meat, butter, cheese, skimmed milk powder, pigmeat, sheep and goat meat Implementation of measure: In case of market disturbance tenders are published for producers who agree not to place their product on the market for a certain period of time Producers conclude a contract with the Paying Agency stating the quantity and duration of private storage for which aid will be provided For some product private storage aid has been never applied (example: sugar)!

Future of intervention measures Intervention measures are an important element of the CMO and will remain in the next programming period 2021 – 2027; Measures seem to be adequate for normal cyclical market fluctuations, but not for big market disturbances (eg. the disturbance caused in 2014 by the Russian import ban), therefore, Member States request efficient measures for situations of market crisis which can be implemented quickly and for which enough financing is available

Case study: Russia’s ban on EU imports Reference on how much is ‘loss’?

Aid schemes: introduction Articles 22 - 60 of CMO Regulation Objective and achievement of objective Promotion of healthy eating habits  school schemes (milk, fruits & vegetables) Improvement of production and marketing in the olive sector  support to programmes of producer organisations Stabilisation of the market and concentration of supply  support to operational programmes in the F&V sector Competitiveness and stabilisation of the market in the wine sector  support to national programmes Improved production and marketing in the apiculture sector  support to national programmes

Aid schemes: quick overview Some measures require the existence of national strategies (school fruit and milk, apiculture, wine) Some measures require the existence of approved producer organisations (aid in the F&V sector, aid in the olive oil sector) Measures are co-financed  Member States and/or producers must cover part of the financing Measures are optional for Member States (school schemes, operational funds in F&V, support in wine sector, apiculture)

„School schemes” Target group: children attending pre-school, elementary or secundary schools Eligible products: fresh or processed fruit and vegetables; drinking milk, cheese, curd, yogurth and other fermented milk products products must not contain added sugar, sweeteners, salt, fats or flavour enhancers Precondition for implementation - national strategy covering six years, containing: needs and expected results from the scheme eligible products accompanying educational measures Union aid is provided for: supply and distribution of products; accompanying educational measures; publicity, monitoring and evaluation Total amount at EU level 250 mil. EUR, each Member State has its envelope (+ possibility for co-financing up to the limit!) 10

Aid in the olive oil and table olives sector Target group: recognised producer organisations or their associations Measures eligible for EU funding: measures from work programmes of the POs, such as: Marketing of table olives or olive oil; Improvement of environmental impact of olive production; Improvement of competitiveness; Improvement of product quality Precondition for implementation: POs have approved three-year work programmes Rate of EU co-financing: up to 75% Measure is implemented in only three Member States: Greece, France and Italy (not in Spain which produces 50% of EU olive oil) For the future implementation in the acceding countries it is needed to submit request during the accession negotiations! 11

Aid in the fruits and vegetables sector Target group: recognised producer organisations who set up an operational fund ! Measures eligible for EU funding: measures from operational programmes of the POs, such as: Planning of production Improvement of product quality Promotion Environmental measures Crisis prevention and management Precondition for implementation: POs have operational programmes of duration from 3-5 years approved by Member States and in accordance with national strategies Environmental measures in the operational programmes should cover at least 10% of the funding EU co-financing rate: up to 50% of the actual expenditure 12

Support in the wine sector Target group: Member States which implement 5-year national support programmes Measures eligible for EU funding: Promotion Restructuring and conversion of vineyards Green harvesting Harvest insurance, mutual funds Investments (in Croatia 2/3!) Innovations Distillation of wine by-products Precondition for implementation: support programmes of the Member State are approved by the European Commission Member States can be co-financed by the EU within limits of their national envelopes 13

Aid in the apiculture sector Target group: Member States which implement 3-year national support programmes Measures eligible for EU funding: Technical assistance for beekeepers and their organisations Combating disease, especially varroasis Rationalisation of transhumance Support to laboratories Market monitoring Enhancing of product quality Precondition for implementation: national apiculture programmes of the Member State are approved by the European Commission 14

Authorisation of vine plantings Articles 61 - 72 of the CMO Regulation Objective: to control the increase of wine production in EU and thus protect the stability of the market Implementation: Member States grant authorisation for new planting upon request; limit of new plantings per year = 1% of the Member State area under wineyards Exemptions from authorisation of vine plantings: Areas planted for experimental purposes Areas planted for the consumption in the household of the wine-grower Member States with less than 10,000 hectares of vineyards Member States which did not implement the planting right regime on 31.12. 2007 (applicable for Croatia!) Scheme applies until 31.12. 2030. 15

Measures in the sugar sector Articles 124 - 144 of the CMO Regulation During the production quota system sugar was one of the most regulated sectors: Limits on production of beet sugar: MSs & producers OOQ sugar Production levies & Minimum beet prices Special export / import regime for quota and OOQ sugar Since 1 October 2017 only Articles 125 and 126 apply! Objectives: Art. 125: to regulate the relationship between producers and buyers of sugar beet (sector agreements); Art. 126: to monitor the sugar market. 16

Sugar sector agreements Written agreements on buying of sugar beet must be concluded between sugar beet growers and sugar untertakings Mandatory elements of the agreements (Annex X of Regulation 1308/2013): Quantity of beet to be delivered and price for those quantities Price adjustments if the beet is not of standard quality Sugar content of the beet and methods for determining the sugar content Conditions linked to delivery and transport Procedures for determining the delivery weight Procedures for handling the beet pulp Period for payments (case study: national legislation differs!) 17

Monitoring of the sugar market Member States have the obligation to notify to the Commission data on (new rules as of 1 October 2017!): Prices: each month for sugar, end of June for sugar beet Production – once a year: sugar beet area; production of sugar, bioethanol and isoglucose Stocks: each month for sugar and isoglucose Details provided in Commission Implementing Regulation 2017/1185 Data published on the Sugar Market Observatory website of DG AGRI 18

State aid Articles 211 - 218 of the CMO Regulation State aid provisions of the TFEU aim to protect the functioning of the common market by limiting support by Member States to enterprises and introducing procedures for approval of state aid State aid provisions of the CMO regulation provide exemption of CMO measures from state aid rules, thus Payments by Member States for financing of CMO measures shall not be subject to additional approval by the Commission in accordance with state aid rules (eg. apiculture, wine programme, school scheme) Other national payments exempted from state aid rules: National payments for Finland and Sweden from their accession treaties (eg. reindeer, sugar) National payments for nuts 19

This publication has been produced with the financial assistance of the European Union The contents of this publication is the sole responsibility of NIRAS IC Sp. z o.o. and can in no way be taken to reflect the views of the European Union