EU Support to Promotion of Agricultural Products Today and Tomorrow Bruno De Boni European Commission DG AGRI / Unit D4 Promotion of Agricultural Products Helsinki 24 October 2011

2 1.THE SITUATION TODAY 2.FUTURE POLICY 3.QUALITY OF PROGRAMMES 4.SELECTION CRITERIA 5.MOST COMMON REASONS FOR REJECTION OF PROGRAMMES

3 1. THE SITUATION TODAY

4 What? The co-financing of Information and promotion measures for : –agricultural products and their method of production –food products based on agricultural products Where? on the internal market on third country markets

5 Goals  to achieve market development  to boost product image in the eyes of consumers to supplement and reinforce Member States schemes (multiplier effect on national and private initiatives)

6 Council Regulation 3/2008: basic regulation Commission Regulation 501/2008: detailed implementing rules Legal Basis

7 Principles of EU promotion policy Generic information and promotion of European agricultural products Measures shall not favour particular brand names or product origins Messages on product characteristics and general themes: quality, nutritional value, safety, traceability, production methods, product image.

8 Initiative Agricultural EU trade and/or inter-trade organisations representing their sectors in one or more Member States or at EU level Member States: in the absence of programmes for PDO/PGI/TSGs, organic farming and/or other EU schemes for quality and labelling

9 Professional organisations At the core of the system! They are responsible for the proper implementation and management of the programmes But they always act with the help of an implementing body (publicity agency, etc.)

10 Funding EU: maximum 50% Proposing professional organisation(s): minimum 20% Member States: to top up the Commission may set lower or higher limits to the costs of the programmes in accordance with “Comitology” procedure

11 50% EU co-financing: 2 exceptions Programmes promoting fruit and vegetables to schoolchildren (Reg. No 1182/07 of the Council) Programmes on reasonable drinking [of wine] (Reg. No 479//08 of the Council): The Commission co-finances up to 60%

12 Information and promotion measures Information campaigns Promotion through info material, advertising and PR activities Participation in events, fairs and exhibitions Internet, audiovisual measures, etc.

13 Information and promotion measures Max. 3 years. Renewable IF Evaluation Duration Information campaigns Promotion through info material, advertising and PR activities Participation in events, fairs and exhibitions Internet, audiovisual measures, etc.

14 Reg. xxx/2011, xx October 2011: a new and more efficient schedule

15 Internal market promotional programmes – type of action used

16 Third countries promotional programmes – type of action used

17 EU Promotion Budget EU share : approx. 50 Million € per year. With the contributions by professional organisations and Member States, the budget represents approx. 100 Million € per year. Approx. 530 Million € allocated by the EU budget in the period Ratio: Internal Market: 2/3; Third Countries: 1/3.

18 EU Promotion Budget Period For the whole period : –484 programmes adopted (out of which 42 multi products) –Total budget: 1.069,7million € –EU contribution: 528,7million € Internal market: –351 programmes adopted (out of which 17 multi products) –Total budget:808,00million € –EU contribution:398,00million € Third countries: –133 programmes adopted (out of which 25 multi products) –Total budget:261,7million € –EU contribution:130,7million €

19 Programmes distribution per Member States

20 Programmes distribution per products

21 Number of accepted programmes average acceptance rate = 43% Acceptance rate= Number of accepted proposals Total no. of programme proposals

22 Financial execution Average execution rate = 83% Execution rate = Total payments Total approved budget

23 Other actions fully managed / financed by Commission Exceptional – limited budget. Promotion campaign on organic farming ( ). High Level missions and promotional events to improve market access for EU products and enhance visibility of EU.

24 Other actions fully managed / financed by Commission Examples (since 2007): High level trade missions Commissioner + Business Delegation: India (2007), China (2009), China (2011). Promotional event, stand, etc.: China (2008), Cape Town (2008), Hong Kong (2009), Russia (2010), South Korea.

25 2. FUTURE POLICY

26 A reform in 3 steps Step 1 : 14 July Launch of a public consultation within a Green Paper. End of public consultation 07/10/11. More than 170 contributions have been received. Step 2 : First half of 2012 Communication. Step 3 : End of 2012 Legislative proposals.

27 Green Paper : consultation ran until questions under 4 main axis : 1) General aims of the policy. 2) Aims/ measures in the internal market. 3) Aims/ measures in the external market. 4) Content and rules for implementation and management.

28 1) What should be the aims of the promotion policy ? Good results known and recognised. Some limits of the current policy (e.g.) : –Not enough target on EU added value. –Actions not well balanced between different MS, products or markets. –Complicated management. –Consistency between EU promotion regimes.

29 Need to maximise added value for Europe It includes : –Enhancing more effectively European agricultural production. –Promoting the EU’s very high standards. –Offering consumers better information on the European production model. –Raising awareness of quality systems and of the diversity of products available in Europe.

30 2) Aims/ measures in the internal market Needs : more information versus promotion Possible measures : –Information campaigns on different subjects/themes –Promotion measures to illustrate the European production model –One-off interventions in the event of a crisis –Creation of a European platform for exchanging good practices

31 3) Aims/ measures in the external market Needs : More promotion versus information To strengthen the European farming competitive position Possible measures : –Technical support given to producers/companies –Development of marketing strategies –Encourage SME’s to join forces for trading –Helping newcomers

32 4) Content and management Beneficiaries Consistency Eligible products and measures Origin and brands Multi country programmes Implementation

33 SubjectTodayFuture ??? Beneficiaries Professional organisations Specific situation as regards wine promotion Wider access Link with rules on promotion on private brand Consistency 4 main schemes with different rules Better coherence Develop synergies between the different schemes Eligible products and measures Wide list of products or themes Programmes related to specific products or quality systems Establishment of key products based on EU promotion strategy Promotion of key messages, illustrated by products

34 SubjectTodayFuture ??? Brands + Origin No brand oriented and reference to origin should be secondary except for designation provided for under EU rule (PDO/PGI) 2 special rules : Wine and F&V CMOs Recognition of the ‘leverage effect’ of brand and origin but legally feasible? Need to ensure that the EU message is the prominent one Multi Programmes with high EU added value More difficult to implement Specific rules needed New role for the professional organisations at EU level Implementation Selection process in two-fold MS/ conformity + Commission/final selection Selection at MS level Selection at EU level

35 Conclusion A lot of questions Main challenges to define the future policy seems to be : –High EU added value. –Consistency. –Origin, list of products, brand names, beneficiaries. –Simple and effective.

36 Next steps after the closure of the consultation –Analysis and summary of the 170 answers received by –Presentation of the result in the EU Agricultural Council in November. –Polish Presidency conference on Promotion on –Basis for Communication and impact assessment work.

37 And in the meantime? Improving the functioning of the current framework by: –streamlining procedures (amendments to Reg. 501/2008). – giving more systematic assistance (templates, workshops, exchange of best practices). –promoting multi country programmes. –reducing the refusal rate.

38 3.QUALITY OF PROGRAMMES

39 Essential elements of a good proposal 1 Proposing associations have to be representative of the sector Detailed market analysis Practical knowledge of the markets, especially in Third Countries programmes Adequate description of budget and actions

40 Essential elements of a good proposal 2 Coherent set of actions, linked to the objectives Measurable objectives, with a clearly defined starting point for the measurements Precisely defined method of evaluation of the programme Synergy/complementarity of the programme with other initiatives in the sector, public or private European dimension

41 Essential elements of a good proposal 3 “SMART objectives”: specific, measurable, achievable, realistic and timed “Coherence +”: Strategy, Target groups, Themes and messages, schedule of actions DETAILED COSTS BREAKDOWN Clear budget table (annex II Model Contract) + table per target country

42 Example: Promotion at points of sales Required elements in the description of the action Names and locations No of promotional days Duration of each promotional day No of materials and samples distributed Target groups No of persons employed Timetables Other elements (uniforms, stands etc)

43 Budget as detailed as possible realistic (common market prices) (estimated) future inflation rate can be integrated clear division between costs (for material etc.) and fees (for implementation and planning)

44 Implementing Body Fees flat-rate: 13% of actual costs of implementing the measures (15% in the case of programmes of several MS) OR invoicing on hourly basis / work actually carried out

45 Evaluation of Results carried out by an external body (tendering procedure possibly necessary) detailed description of evaluation methods existing evaluation is pre-condition for a possible continuation of the programme costs: max. 3% (5% during last year) of actual action costs + overheads not used (optional)

46 4.SELECTION CRITERIA

47 Selection criteria Criterion 1 – Coherence between the implemented actions and the objectives of the Regulation Criterion 2 - Actions and information channels used and their cost-effectiveness

48 Selection criteria Criterion 3 – Coverage and content of the programmes Criterion 4 - impact and effectiveness of the actions Criterion 5 - Complementarity between Member States' programmes and programmes submitted by professional organisations

49 5. Most Common Reasons for Rejection of Programmes

50 Most Common Reasons for Rejection of Programmes  PO is not representative  no relevant / precise market study  No SMART objectives  actions do not form a coherent set of actions  actions do not relate to target group(s)  insufficiently detailed description of actions / breakdown of action budgets  focus on just one city  not sufficiently cost-effective  missing evaluation of previous programme (where applicable)  shortcomings in the selection procedure of IB

51 Most Common Reasons for Rejection of Programmes II Most programmes fail due to insufficiently detailed budgets and explanation of actions „To be acceptable the programme should better define the actions contained therein, and also explain and justify the different costs concerned. In conclusion the programme needs to be completely revised and therefore cannot be accepted.„

52 Most Common Reasons for Rejection of Programmes III “Most of the proposed activities do not offer a sufficient level of budgetary breakdown, making it difficult to assess the value for money of the actions proposed. In any case, most of the actions seem rather vague, and only a global budget is presented. Therefore the budget submitted lacks a sufficient level of breakdown so as to duly justify the costs involved.”

53 More information Thank you for your attention and any constructive proposals