"A sustainable EU banana sector" - Speech by EU Commissioner Fischer Boel

Summary: "A sustainable EU banana sector" - Speech by EU Commissioner Fischer Boel (20 September 2006: Brussels)

Speech by Mariann Fischer Boel, Member of the European Commission responsible for Agriculture and Rural Development, "A sustainable EU banana sector," Press conference, Brussels

I am delighted to say that the Commission has just adopted my proposals for a reform of the support arrangements for EU banana producers.

Bananas grown on EU territory account for 16% of total supply.

Here we are talking mainly about the French overseas departments of Guadeloupe and Martinique, the Azores, Madeira, and the Canary Islands.

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

These reforms are long overdue.

What is it we want to achieve through these reforms?

- to bring the system into line with reforms in other agricultural sectors,

- to ensure a fair standard of living for producers,

- to stabilise public expenditure,

- to increase market-orientation,

- to take into account the fact that bananas are an important part of the economy of the outermost regions,

- and to bear in mind that these regions are often handicapped by their remoteness and difficult growing conditions and the fact that there are often few alternative employment possibilities.

The current aid scheme for EU banana producers is a relic from the past and has to change.

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.

Such trade-distorting payments are also difficult to defend in global trade terms, where we are trying to encourage others to make their farm subsidies more trade-friendly.

And there is currently an open -ended financial engagement for banana producers.

This is unsustainable at a time when we will soon hit the CAP spending limit set by the European Council in Brussels of October 2002

These proposals also come against the background of:

- the implementation of a new generation of partnership agreements with the ACP countries,

- the end of the exemption for bananas from the Everything But Arms agreement,

- the introduction of a new "tariff-only" system for imports of bananas from Latin America,

- the renewal of the EU's policy towards its outermost regions and the POSEI programmes specifically dedicated to supporting their agriculture.

Our proposals:

- After long consultations and an in-depth impact assessment, we have decided:

- That the current system of compensatory aid should be scrapped.

- This will be replaced with a budgetary transfer to the POSEI programme, which provides an envelope of money for agriculture in the outermost regions.

- POSEI gives the Member States themselves flexibility on how to distribute the money and by incorporating bananas, POSEI will provide the overall frame for agriculture in the outermost regions.

- All of this will be far more satisfactory than the current system of annual negotiations in Brussels.

No later than 2009, the Commission will carry out a review of the workings of the POSEI scheme.

And we will bring this review forward if we note a substantial worsening of the economic conditions in the outermost regions.

The budget we propose is 280 million euros a year, of which Spain will get 50.4 percent, France will get 46.1 percent, Portugal will get 3.1 percent and Greece 0.4 percent.

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 euros for Cyprus, 1.1 million euros for Greece and 0.1 million euros 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.

Thank you for listening.

Ref: SP06-299EN
EU source: European Commission
UN forum:
Date: 20/9/2006

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