EC adopts 'overdue' banana support reforms

By Anthony Fletcher

- Last updated on GMT

Related tags European union

The European Commission has adopted 'long overdue' proposals to
reform the support arrangements for EU banana producers.

The new regulations will bring the system into line with reforms in other agricultural sectors, and are designed to ensure a fair standard of living for producers and to increase market-orientation.

"The current aid scheme for EU banana producers is a relic from the past and has to change,"​ said Mariann Fischer Boel, member of the European Commission responsible for agriculture and rural development.

"Producers are artificially isolated from the market by payments which automatically compensate them for price changes. This is inconsistent with our modernised Common Agricultural Policy, which aims to encourage producers to follow market signals."

The proposals also take into account the fact that these regions are often handicapped by their remoteness and difficult growing conditions, and the fact that there are often few alternative employment possibilities.

Bananas grown on EU territory account for 16 per cent of total supply. The fruit is mainly grown in the French overseas departments of Guadeloupe and Martinique, the Azores, Madeira, and the Canary Islands.

However, bananas are also grown in smaller quantities in Cyprus, Greece and continental Portugal.

The Commission has previously stated its support in abolishing the current compensatory aid scheme for banana growers, and adopting the so-called 'POSEI' option.

This would add money used to support banana producers to the so-called POSEI programme, which supports agricultural production in the outermost regions of the EU. For bananas produced in regions other than the outermost regions, the money would be transferred to the Single Payment Scheme, which applies to agricultural products covered by previous reforms.

Following adoption by the Council, the Commission wants the new rules to apply from the 2007 marketing year.

The proposal for reform follows the new EU import arrangements for bananas, global trade negotiations, a new generation of partnership agreements with the ACP countries and the renewal of the EU's policy towards its outermost regions.

The Commission proposes to abolish the current aid scheme in the CMO, which compensates producers for drops in prices. It would be replaced with a budget transfer to the POSEI scheme that will become the main regulatory instrument for bananas in the outermost regions.

"The budget we propose is €280 million a year, of which Spain will get 50.4 per cent, France will get 46.1 per cent, Portugal will get 3.1 per cent and Greece 0.4 per cent. For producers in Greece, Cyprus and continental Portugal, the support will be included in the decoupled Single Payment Scheme introduced for other sectors in the reforms of 2003, 2004 and 2005.

"The budget here is €3.4 million for Cyprus, €1.1 million for Greece and €0.1 million for Portugal.

"I strongly believe that POSEI is the best option for the EU banana sector and the best service we can provide to the sustainability of the producing regions in the long run. With this reform, banana production will continue to play a leading role in the future of our outermost regions. "

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