The reform of the CMO Fruit & Vegetables – Better policy for a stronger Sector PROGNOSFRUIT 2007 Vilnius, Lithuania DG Agri/C.2

August Better for the … 1. Farmer: Freedom to farm 2. Taxpayer: Sustainable expenditure 3. Citizens: Transparence & coherence

August Better for the … 4. Consumer: Focus on health benefits 5. Environment: Sustaining the effort 6. Global partners: Full WTO conformity 7. Sector: Level playing field

August A Better for the FARMER: Freedom of choice which Producer Organization (PO) to join for which product (fresh & processed) Simplified mergers and cooperation's (transnational, Associations of PO) MS to design ‘National programs’ as overall guidelines for Operational Programs (OP)

August B Better for the FARMER: OP to be elaborated in coherence with MS National strategy setting out overall objectives, priorities and eligible measures Single Payment Scheme (SPS): Integration of all agriculture land in line with respective MS model Application of rules of cross-compliance in line with Rural Development rules (good agriculture practice)

August Share of PO in national F&V production (in 2004, %) Source: AGRI/C.2

August C Better for the FARMER: No ceiling on budget for POs, annual growth rate foreseen due to increased organisation of 50 Mio€ MS with low degree of organisation (under 20% VMP) receive additional aid (e.g. NMS, RUP, PT, EL) New instrument for crises management, managed by PO to provide for security and stability

August Expenditure of Operational Funds (in 2005, Mio€) Source: AGRI/C.2

August Better for the TAXPAYER: Less distortive expenditure: No more export restitutions, EU-funded market withdrawals More sustainable expenditure: 50% co-financing of Operational Programs e.g. for crises management Overall ceiling of max. EU-cofinanced support up to 4,1% of VMP for POs retained Rural Development: No double financing of measures eligible both under CMO and Rural Development

August A Better for the CITIZENS: Decoupling of aid: Processing aid abolished, transferred into Member states national SPS envelopes Coherence: Introduction of performance indicators in Operational Programs Transparency by publication of MS National Programs for comparison

August EU co-funded expenditure per category (in Mio€) Source: AGRI/C.2

August B Better for the CITIZENS: Drastic reduction of withdrawals: - EU-funded only for free distribution and - PO co-funded as part of new crises management instrument (max. 33% of OP budget) Abolishment of export restitutions

August A Better for the CONSUMER: Focus of F&V promotion programs within OP on ‘young consumers’ Free distribution for charitable organisations and also for schools 100% EU-funded Obligatory labeling of country of origin for all fresh F&V

August B Better for the CONSUMER: Within OPs, if the focus of promotion programs is on young consumers, co-financing rate is increased to 60% Increase of indicative budget for direct EC-funded promotional actions under reg. 2826/2000 from 6 Mio€ to 12 Mio€

August C Better for the CONSUMER: Council declaration on School Fruit Scheme: « Commission invite to present as soon as possible a proposal based on the evaluation of the benefits, practicability and administrative costs involved in such a Scheme. »

August A Better for the ENVIRONMENT: Environmental standards (GAP) in line with Rural Development All area under SPS: cross-compliance fully applicable Measures to protect the environment not only cover production but the whole marketing chain (transport, packaging et al.)

August B Better for the ENVIRONMENT: OP measures supporting organic production eligible for 60% co-financing All PO must spend at least 10% of their total Operational Fund on measures to protect the environment Investments with harmful impact on the environment are not eligible for funding within OP

August Expenditure on environmental measures (% of total OF, 2005) Source: AGRI/C.2

August Better for the GLOBAL PARTNERS: All measures in conformity with WTO obligations: No more export restitutions, No more processing aid coupled to production No 100% financing withdrawals except for free distribution Marketing standards harmonized with international rules

August Extra EU-25 trade (Mio €) in fresh vegetables, 2005 Source: AGRI/C.2

August Better for the SECTOR: Transition rules for the decoupling of the processing aid in some Member states Special area-based temporary aid for the restructuring of the soft fruit sector in several Member states

August Background O bjectives of the reform Time table

August  To contribute to achieving sustainable production that is competitive both on internal and external markets  To reduce fluctuations in fruit and vegetables producers' income resulting from crises  To increase consumption of fruit and vegetables in the EU Reform objectives 1

August Reform objectives 2  To continue the efforts made by the sector to maintain and protect the environment  To simplify and where possible reduce the administrative burden for all concerned

August Reform objectives 3 These objectives of the reform have been identified taking into account: - consistency with the reformed CAP, market support and rural development policy, -WTO compatibility, -conformity with the financial perspectives.

August Time table  Commission publishes proposal on 24th January 2007  Discussion in Council Working Group and Special Committee for Agriculture  Political agreement in the Council on 11th June 2007  Adoption by the Council in September 2007  Commission implementing rules elaborated by end 2007  Entry into force by 1st January 2008

August Thank you for your attention ! en.htm