EP Agriculture Committee: Keep EU Support for EU Banana Production

27/11/06 The EP Agriculture Committee voted to continue linking compensatory aid for banana growers to banana production. It also advocated keeping current rules on producers' organizations, as well as the current system of advance payments. The committee nonetheless wishes the Commission to review the policy in 2009, especially if third-country import tariffs change in the meantime.

The Agriculture Committee's opinion on the Commission's plans to reform the existing compensatory aid scheme for the banana sector are set out in a consultation report by Jean-Claude Fruteau (PES, FR). This scheme is especially important for the Union's outermost regions, which face growing competition from Central and South American banana producers.

The Commission had proposed shifting aid towards producer support by using the Single Payment Scheme (SPS), which would decouple payments from banana production. The committee would prefer 40 per cent of the national aid to be dispersed through a crop specific payment, and only 60 per cent to be available through the SPS, so as to keep incentives for producers to continue cultivation.
 
For the same reason, committee members also sought to maintain the Community-level rules on producers' organizations, which play a key role in the management of crop-specific aid. Mr Fruteau's report suggests that affiliation to a recognised organisation be made mandatory for EU payment recipients, unless their geographical circumstances make this impossible.
 
The committee also called for the system of advance payments to be maintained, which helps tide producers over the period until October, when the first payments are made. Finally, the report argues that any changes in tariffs against third countries would necessitate a review of the aid scheme, since a fall in tariffs would need to be compensated for by a larger compensatory aid envelope.