Banana sector (debate) 
President
The next item is the report by Mr Fruteau on behalf of the Committee on Agriculture and Rural Development on the proposal for a Council regulation amending regulations (EEC) No 404/93, (EC) No 1782/2003 and (EC) No 247/2006 as regards the banana sector C6-0339/2006.
Mariann Fischer Boel
Member of the Commission. Mr President, first of all I should like to thank Members for their efforts to speed up the discussion on this banana proposal, and express special thanks to Mr Fruteau, who delivered an excellent report within a very tight time frame.
I am convinced that we all have an interest in approving the banana proposal before the end of the year, to give the producers a clear framework within which to operate in the future and also, of course, to achieve budget stability; but also to reassure the banana producing regions that they can count on the tangible solidarity of the European Union.
Bananas are very important for the social and economic viability of our outermost regions. They provide revenue to more than 15 000 holdings and jobs to some 24 000 farmers. Those regions face very specific handicaps and the Treaty itself grants them a specific status, in Article 299. They are, in all respects, part of the European Union and have every right to enjoy the benefits of European Union policy. The banana reform is the practical expression of our commitment to confirm solidarity within the Union. I am very happy that the European Parliament agrees with the Commission on the need to reform the current banana aid scheme and to try to bring it into line with our common agricultural policy.
A crucial consideration is the budgetary unpredictability of the current expenditures within the banana sector. I am delighted that the European Parliament agrees on the very substance of the proposal, namely, the choice of the POSEI solution, which represents quite a number of different advantages. First of all, it is consistent with the CAP reform; it is a very flexible tool for Member States and for the regions in question; it permits Member States to give additional financing; and, last but not least, it gives predictability from a financial point of view.
Another important point on which you agree with the Commission's proposal regards the budget, which is based on the average support granted over the period 2000-2002, and a marginal assurance has been added to take into account the variability of the banana market. The recent change in the import arrangements and a possible agreement with banana-producing third countries have also been taken into account.
You have requested that the Commission should submit a specific report on POSEI in 2009, if the livelihoods of banana producers, in particular, were to deteriorate following a change in the external regime. As a matter of fact, our proposal already focuses on, or foresees, the submission of a report on the whole POSEI regime in 2009, and that will include the banana sector. Let us not forget that the banana sector represents more than 50% of the agricultural revenue in some producing regions.
It goes without saying that this report will be submitted sooner in the event of a deterioration of livelihood in the outermost regions. As concerns Crete, Cyprus and the Algarve, we should keep in mind that banana production involves less than 400 hectares and some 300 holdings overall. That hardly justifies a derogation from the general principle that allows farmers the freedom to choose their crops according to the market and the best advantage they can derive from their production.
I am looking forward to the discussion with you tonight. Again, thank you for being so quick in your action on this issue.
Jean-Claude Fruteau 
rapporteur. - (FR) Mr President, Commissioner, ladies and gentlemen, the European Union is, today, about to reform the internal strand of the common market organisation (CMO) in the banana sector, in order to adapt the aid scheme for European producers to the new global trade situation and to the principles of the new common agricultural policy.
This change, which is the subject of the report brought before the House today after being approved by a very large majority by Parliament's Committee on Agriculture and Rural Development, undoubtedly goes in the right direction. For banana producers in the outermost regions, who account for more than 98% of the EU's production, it is proposed to transfer a package of almost EUR 280 million a year to the POSEI programmes, which will make for greater flexibility and better use of Community funds. In this regard, I should like to thank you, Commissioner, for the reassessment of the amounts allotted for this reform, which should make it possible to better assure the sector's viability, particularly in the outermost regions where banana production plays a vital economic and social role for which no other agricultural product could compensate.
I must, however, remind you that the amounts proposed were calculated on the basis of the current customs tariff. Consequently, the uncertainty concerning world trade negotiations suggests that there may be a further reduction in this tariff level. Given that, at EUR 176 a tonne, the banana sector is already in an extremely delicate situation that threatens the socio-economic balance of many of the producing regions, a further reduction in the customs tariff would signal the end of banana production in the Community if no adjustment is made to the plan proposed by the Commission.
If the opening up of markets is to make a contribution to revitalising the production structures, it can do so only insofar as the fundamental principles of regulation and equity are combined, that is, the various producers need to respect the common rules that put them on an equal commercial footing. It is, however, quite evident that this equality is totally lacking in global trade given the gulf that exists between the social and environmental standards of European countries and those of the countries of Central or Latin America. Faced with this problem, the resolution of which has to remain one of the European Union's priorities, the aid granted to Community banana producers is necessary in order to compensate for the failures in the global trade system. To be effective, these internal regulatory measures must be in line with the external regulatory tools. It is in this light that the Committee on Agriculture and Rural Development is insisting on strengthening the evaluation measures indicated in the reform proposals, in order that the Commission could take positive steps if the external tariff situation were to deteriorate, for example by increasing the amount of the financial packages granted to producers.
The survival of banana production in the European Union also depends on its capacity to optimise its production costs while respecting the social rules and living standards of the producers. Since the CMO was established, producers' organisations have in this way enabled a better concentration of Community supply of bananas in the market and contributed to a noticeable reduction in the costs relating to the cultivation of bananas in the European Union. It would now be contradictory in economic terms to disrupt this process. That is why we believe it is essential to maintain a regulatory framework in this regard at Community level in relation to producers' organisations, in order to further the efforts already made towards strengthening our production structures. As the Committee on Agriculture and Rural Development has asked, this willingness should, furthermore, be demonstrated by an obligation to affiliate to a producers' organisation in order to benefit from aid provided within the context of the POSEI package, except when circumstances do not allow it.
Finally, and this will be my last comment, there is the question of the administration of aid. The support system for production within the present CMO in bananas does provide for schemes for bi-monthly advances that are essential to the sector's activity in the outermost regions as in the rest of the Union's producing countries. The transfer of packages to the POSEI programmes, however, is not coupled with any plan to continue this system of advances. This jeopardises the survival of producers who would therefore have to resort to private sector borrowing, at a time when the characteristic fluctuations of the commercial climate in this sector does not encourage banks to grant long-term loans. In this context of economic instability it is up to the European public powers to provide adequate safeguards so that these trade policy choices at global level do not run counter to the interests of those producers who are the most fragile in the Union.
Salvador Garriga Polledo 
draftsman of the opinion of the Committee on Budgets. - (ES) Mr President, the Committee on Budgets has unanimously approved its opinion for this report on the reform of the Council Regulation and, furthermore, it entirely agrees with the fundamental aspects of that proposed reform.
Our only complaints - and the Commissioner herself has already explained them - relate to the lack of time available to us to analyse the proposal, since we have had to opt for the urgency procedure.
In any event, in the view of the Committee on Budgets, the only important thing is to accept the general funding mechanism proposed and, at the same time, to ensure that the proposal is entirely in line with the Court of Auditors' report on the financial management of the common organisation of the markets in the banana sector.
Our committee simply proposes an amendment of a generic nature, which we are proposing for all programmes not subject to codecision, calling for the general financial framework that we have approved for 2007-2013 to be respected.
At the same time, in order to stress Parliament's involvement even further and given that the consultation procedure is being chosen, we would like the aid to banana producers to be subject to this Parliament's control by means of the annual budgetary procedure.
As a whole, however, this proposal is a good one and fundamentally helps all of those outlying European regions that face great difficulties competing with third-country products.
Pedro Guerreiro 
draftsman of the opinion of the Committee on Regional Development. - (PT) Mr President, the Commission's proposal to reform the Common Organisation of the Market (COM) in the bananas sector forms part of the process of liberalising the farming sector at EU level and in the context of the World Trade Organisation.
The Commission is proposing to decouple aid from production, to implement the single payment system, and to abolish the compensatory aid scheme that contributed to price stability and safeguarded, albeit only partially, producers' income. The 'POSEI' option involves incorporating existing aid into the POSEI programmes for banana producers in the outermost regions, namely Madeira, the Azores, Martinique, Guadeloupe and the Canary Islands.
The Commission's proposal is also aimed at saving money by stabilising budget expenditure on the COM. Consequently, if the objective is to guarantee an income and a decent standard of living for banana producers, it is hard to see how the Commission's proposals will improve upon the current COM. Far from it, in fact. As draftsman of the opinion of the Committee on Regional Development, I should like to emphasise the socio-economic importance of the banana sector in the outermost regions and its contribution to achieving economic and social cohesion, on account of the income and employment which it generates, the economic activities to which it gives rise, both upstream and downstream, and its effect of maintaining an environmental and landscape balance which encourages the development of tourism.
The amendments tabled by this committee, some of which are referred to in this report, are essentially aimed at offsetting some of the negative points in the Commission's proposal. They seek to protect producers, to ensure the development of the sector, to guarantee the implementation of a system of advances, and to continue to support producers' organisations in order to promote marketing. Furthermore, we are proposing mandatory interim assessments of the new measures in order to ensure the levels of income and employment and to prevent any deterioration in the sector's economic situation. Lastly, we are proposing only the partial decoupling of aid.
Carmen Fraga Estévez
on behalf of the PPE-DE Group. - (ES) Mr President, on behalf of my group, I would like to congratulate Mr Fruteau on the excellent work he has done in drawing up this report and for his willingness to reach a consensus. I would also like to thank the Commissioner for her proposed reform, which has been accepted in general terms both by the sector and by this Parliament.
I hope that, from now on, these new rules will put an end once and for all to the arguments within the World Trade Organisation, and I would therefore ask that, despite the new pressure from certain Latin American countries, the tariff of EUR 176 per tonne, which entered into force on 1 January following the agreement reached in Hong Kong, be defended and maintained as a minimum with a view to providing the European banana sector with a little stability.
Commissioner, the outermost regions, which are the European Union's main producers of bananas, are highly dependent on this product and therefore any modification to the arrangements governing the sector, in particular to the external arrangements, must be taken into account. I am therefore amazed by the debate that is taking place within the Council of Ministers on the period of reference proposed, which has led to a budget of EUR 280 million per year. I must insist that that period of reference must be the same as the one applied to the other COM reforms, and it would therefore be incomprehensible for there to be an exception to the rule set so far, or a budgetary haggle, when 98% of that sum is quite rightly intended for the outermost regions.
Since it is important, I would also like to mention another of the requests included in the report: that relating to the continuity of the system for producers' organisations, with a view to maintaining the concentration of the Community produce, which has been one of the main successes of the COM in bananas. Its disappearance, Commissioner, would only exacerbate the disadvantages faced by Community producers in the face of third-country imports.
Manuel Medina Ortega
on behalf of the PSE Group. - (ES) Mr President, the Commission has made a great effort to adapt the internal system for bananas to changing circumstances. I believe that we must congratulate the Commission on that effort, which will essentially make it possible for Community banana producers to survive in very difficult circumstances.
As Mr Fruteau, the rapporteur for this report, pointed out, there is still concern about a possible future change to the common organisation of the markets in bananas externally.
The Commissioner has mentioned certain guarantees with regard to the Commission's monitoring of this issue, but as a Member of this Parliament I feel obliged to point out our concern, which is enshrined in certain amendments that have been presented in the Fruteau report and that I hope will be approved by Parliament tomorrow.
In short, Mr President, I believe that Parliament will be able to approve this report tomorrow and probably some of the fundamental amendments, but the most important thing - I repeat - is that we can count on the Commission to carry on protecting the banana sector in the future.
Witold Tomczak
on behalf of the IND/DEM Group. - (PL) Mr President, reform of the banana market affects a couple of the so-called outermost regions of the European Union. Its implementation is more or less a foregone conclusion, which is not at all the case for reform of the fruit and vegetable market. The latter involves several dozen types of fruit and vegetables and is of far greater importance for the whole Union, but is forever being delayed. The future of some 300 000 jobs is at stake in the banana producing regions, whereas in Poland alone some two million jobs depend on fruit and vegetable production. The cost of dealing with the main problems affecting the fruit and vegetable market is barely EUR 80 million a year. At the same time, the Union's budget would not suffer, as up to EUR 300 million is not taken up in that market every year. The annual cost of reform of the banana market amounts to EUR 280 million. This is a far higher sum, but will deal with fewer problems.
I would remind the House that, on 1 May 2004, Poland and nine other countries became Members of the European Union and are entitled to be treated on an equal footing with other Member States. The fact that they are not located on picturesque islands is no excuse for failing to do so. In view of the situation I have described, references to a common agricultural policy can only be cause for embarrassment and shame, but it is not I who should be ashamed.
Emanuel Jardim Fernandes
(PT) Mr President, Commissioner, ladies and gentlemen, I fully endorse the report by Mr Fruteau, whom I congratulate on his outstanding work, amending the Commission's proposal. I support the objectives outlined in the report, which are as follows: to maintain Community banana production, in view of its vital contribution to employment, to economic and social development and to safeguarding the environment in banana-producing regions, especially in the outermost regions.
The second objective is to safeguard the incomes of banana producers and to prevent the economic situation of the banana sector from deteriorating. The third objective is to give banana-producing Member States control over the granting of aid, so that this can be done in the most effective way, taking account of the specific priorities of these regions. The report also provides for a specific report to be submitted by 2009 in the event of changes to the incomes of producers, for example if the tariff changes.
I do not find it acceptable, Commissioner, to make aid contingent on producers joining a producers' organisation. I feel it would be more appropriate to leave the decision on such a requirement to the Member States. I therefore propose that this be taken into account and that the Council adopt it accordingly.
Sérgio Marques
(PT) Mr President, Commissioner, this proposal to reform the system of production aid for banana producers is a perfect example of Article 299(2), which provides for specific treatment for the outermost regions on account of their particular characteristics, being implemented in the farming sector.
In the outermost regions, banana production has undoubted economic, social and in particular environmental importance. It is vital therefore that it be maintained, and that is precisely the purpose of this reform. I wish to congratulate the Commission, which has outlined the right path forward: the management of aid via the POSEI programmes, greater flexibility for the Member States in distributing these resources and an end to the isolation of producers from the market, regarding which the producers' warnings must immediately be heeded.
Lastly, the Commission must pay very close attention to the development of the sector. It may become necessary to change marketing conditions that adversely affect producers' incomes, and the Commission must respond appropriately to such a situation by taking the necessary measures.
Czesław Adam Siekierski
(PL) Mr President, the European Commission's proposed reform of the common organisation of the market in bananas is consistent with the philosophy of the 2003 reform of the common agricultural policy. It is also consistent with the commitments undertaken by the Union during negotiations at WTO level. Nonetheless, it is worth assessing the impact of the reforms on the level of banana production in the outermost regions of the Union.
There is a certain similarity between the reform of the market in bananas and the forthcoming reform of the market in soft fruits. The regional market of the banana sector is just as important as the market for soft fruit. The degree of threat to the stability of rural areas and to the livelihoods of the growers and their families is also similar. Both products are very labour intensive.
In addition, it should be noted that the market in soft fruit is under greater threat from unauthorised action by third countries than the market in bananas. In the case of soft fruit only temporary antidumping measures exist, while in the case of the banana market an effective single tariff system is in place.
Some of the support mechanisms proposed for the market in bananas would resolve the difficulties of the market in soft fruit. The European Commission should therefore consider applying them to it, particularly the system of area payments for growers of soft fruit intended for processing.
Let us hope that the measures proposed will have a positive impact on the situation of banana producers. However, we are still waiting for an account of the true costs of this reform.
Mariann Fischer Boel
Member of the Commission. Mr President, I should like to make a few comments about the questions raised here tonight.
As I have already explained in my introductory speech, a report on the implementation of the POSEI programmes will be presented not later than 2009 and will permit the assessment of the situation in the banana-producing regions. If there are substantial changes in the economic conditions affecting livelihoods in the outermost regions the Commission may submit this report earlier.
A question was raised about the situation of the producer organisations. It is important for me to underline clearly that producer organisations have not been abolished. Simply, there is no longer a need for a common definition of producer organisations at Community level. The vast majority of Community producers are already members of producer organisations. It is therefore more appropriate to let Member States decide whether they wish to adopt rules on producer organisations, which will enable them to target regional needs much more specifically and provide support under the POSEI programme. This is possible. Regional authorities will be left to make their own choices. This flexibility built into the system would be the best way to secure sustainable and coherent policy decisions in the outermost regions.
There were some questions about advance payments. It is important that we do not forget that the new system offers a number of tangible benefits to the banana-producing farmers. Firstly, as soon as the POSEI programmes are approved they will have budget clarity for the full period of 2007-2013. This will improve their position if they need to go to the bank about loans. They could also obtain 100% clarity concerning the aid already paid on 1 December. Under the present system, they have clarity concerning only between 20% and 40% of the payments. It is my clear impression that the Member States appreciate these changes.
In general, I can say with some confidence that our proposal on the budget will be very good for the banana-producing countries. If we had chosen other reference periods the result would have been worse than choosing the period 2000-2002. Therefore, I am happy that the European Parliament has decided not to reopen this discussion.
There were a few comments on the fruit and vegetable sector. I am very happy to be able to say today that on 24 January I will be coming to the Committee on Agriculture to give an explanation on the new fruit and vegetable reforms. This will clarify some of the questions that have been raised here tonight.
On the various proposals, the Commission supports the incorporation of Amendment 4, regarding the contribution of bananas to the social and economic cohesion, and Amendment 9, which mentions the importance of various quality standards and the link to tourism, although we might need to revise the wording slightly.
Concerning the amendments asking to link the POSEI report to the banana sector and allow for a partial decoupling in non-outermost regions, the Commission's view is that this would clearly go against the whole idea behind the reform and also the linkage to the 2003 CAP reform.
I wish to thank you once again for all your efforts to speed up the discussion of the banana reform. I am delighted that Parliament seems to agree with the basis of this whole reform and I am looking forward to the vote in plenary tomorrow.
President
The debate is closed.
The vote will take place on Wednesday at 12 noon.
Written statement (Rule 142)
Margie Sudre
(FR) The banana plays a key role in the economies of four of the seven outermost regions, due to the importance of European markets and the exceptionally labour-intensive work that it requires.
Our Parliament must ensure that the proposed support is set at a sufficient level and that it takes account of possible price changes during negotiations at the World Trade Organisation. In order to deal with a possible slump in producers' income, provision should be made for an automatic revision clause, and the current system of financial advances, which is essential to the industry's activity, should be re-established.
Banana producers in the outermost regions are waiting for a clear signal regarding the survival of the sector, in order to restore confidence within the industry. Fragmented and ineffective for many years, the West Indian banana sector is today a model of organisation, and restructuring efforts in this area must be emphasised.
I would like to point out that the banana sector in the outermost regions meets the non-commercial criteria in force within the Union, unlike its competitors in Latin American countries.
Without the banana, which brings 15 000 jobs, representing the real economic backbone of these regions at human, social and environmental levels, the entire agriculture of Guadeloupe and Martinique would be threatened with extinction, for lack of alternative crops.
