ASSISTANCE FOR TRADITIONAL ACP SUPPLIERS
Communication from the Commission to the European Parliament and the Council concerning the special framework of assistance for traditional ACP suppliers of bananas (Council Regulation No 856/1999): Biennial Report from the Commission 2000.
||7 February 2001|
|Forwarded to the Council:
||7 February 2001|
|Deposited in Parliament:
||23 February 2001|
|Basis of consideration:
||EM of 8 March 2001
|Previous Committee Report:
|To be discussed in Council:
||No date set|
13.1 Traditional ACP
producers of bananas favoured under the Lomé Convention
were given assurances that their access to the European market
would be no less favourable in the future. A special system of
assistance was put in place to help them to increase their efficiency
of production and to adjust to changes in the market. This was
replaced in 1999 by a new special framework of assistance (SFA),
which the Commission describes as designed to assist them in relation
to the new realities of the market.
The Commission document
13.2 This is the first biennial report by
the Commission on the operation of the 1999 SFA. The report includes
- the legal background to the SFA. It says that
twelve ACP countries are eligible for financial and technical
assistance. The budget for 1999 is 45 million euros and for 2000
it is 44.5 million;
- the objectives of the programme, which are to
improve the competitiveness of traditional ACP banana production
and provide funding for diversification;
- background on the market. Banana prices vary
widely between Latin American supplies, averaging 558 euros per
tonne in 1999, an ACP average of 620 euros per tonne and 745 euros
per tonne for the Windward Islands;
- a description of the amended EU regime on banana
imports. The Commission is about to adopt a transitional First
Come, First Served (FCFS) method of quota management until 2006
when a tariff only system will apply (see paragraph 13.4 below);
- improving banana competitiveness or funding diversification.
According to the report, most beneficiary countries have opted
to use the funds for improvements to banana competitiveness instead
of for diversification. Only the Windwards have made specific
allocations for diversification and social recovery purposes.
The Commission is asking ACP countries to reconsider their strategies,
with a view to putting more of the SFA finance into diversification;
- technical assistance and monitoring. Financial
provisions have been made for consultants to support economic
and financial analyses, and to monitor progress in recipient countries.
13.3 No impact assessment has been prepared.
The Commission says that it is too early to assess the impact
of SFA funds on banana productivity or diversification.
The amended EU regime
13.4 The Commission describes the outcome
of the detailed discussions which took place between interested
parties after it put forward its proposal to amend Regulation
404/93, in November 1999. The proposal included a transitional
tariff quota system but after months of intensive discussions
it became clear that this would be difficult to achieve. In October
2000, the Commission presented a Communication in which it said
that it considered that the First Come, First Served (FCFS) method
of quota management, proposed in a earlier Communication, was
a viable option. The Council will adopt a formal position on this
Communication, which it reviewed at the October 2000 General Affairs
Council, when the European Parliament has expressed its opinion.
The Government's view
13.5 The Secretary of State for International
Development (the Rt. Hon. Clare Short) comments:
"With regards to the Caribbean, we welcome the
SFA and believe that the allocations are sufficient to support
industry restructuring and diversification. However, there are
bureaucratic obstacles to the effective use of SFA funds and poor
communication between the EC and Windward governments is reducing
the impact of the programme. Slow progress in deploying the funds
effectively has been exacerbated by the reluctance of Windward
governments to face up to the likelihood that up to two thirds
of existing growers and workers will be made redundant over the
next year or so. Planning and project preparation capacity is
also very limited in these small islands.
"The UK is working with the EC and the Windward
governments to ensure that SFA funds are deployed effectively
and reach the most vulnerable producers. Through support to the
development of national poverty reduction strategies and our participation
in the Eastern Caribbean banana donor group, the UK is actively
involved in promoting the development of viable and targeted restructuring,
diversification and social support programmes using EU funds."
13.6 The report, and particularly the
Secretary of State's comments on it, highlight the predicament
facing the Windward Islands, which have historically found it
difficult to devise viable alternatives to banana production.
We now clear this document.
17 African, Caribbean and Pacific countries which are
signatories to the Lomé Convention and its successor, the
ACP-EC Partnership Agreement, known as the Cotonou Agreement. Back