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Mediterranean package

The decoupled single payment scheme provides for special arrangements for hops, cotton, olive groves and tobacco. The provisions relating to these products have been integrated at a second stage into the major reform of the Common Agricultural Policy (CAP) of 2003.

ACT

Council Regulation (EC) No 864/2004 of 29 April 2004 amending Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the Common Agricultural Policy and establishing certain support schemes for farmers, and adapting it by reason of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia to the European Union.

SUMMARY

This Regulation, known as the "Mediterranean package", supplements the major reform of the Common Agricultural Policy (CAP) of June 2003 with provisions relating to the integration of support for tobacco, hops, olive groves and cotton into the single payment scheme.

The Regulation establishes specific direct aid applicable to these sectors. This aid is granted on condition that farmers meet the cross-compliance requirements laid down by the 2003 reform.

Hops

Direct aid for hops has been decoupled from production since 1 January 2005 (except in countries which applied a transitional period until 31 December 2005). However, in order to deal with specific market situations or regional implications, Member States may retain a certain percentage of coupled aid (corresponding to a maximum of 25 % of their national ceiling *).

The reference amount for the calculation of the aid is EUR 480 per hectare for which aid was granted during the reference period 2000 to 2002.

The Regulation on the common organisation of the market in hops contains rules on marketing, producer groups and trade with third countries.

Cotton

Direct aid for cotton has been decoupled from production since 1 January 2006. However, in order to safeguard production in areas where cotton production would be liable to cease if decoupling were applied in full, Member States may retain a certain percentage of coupled aid (corresponding to a maximum of 35 % of the total amount of aid previously granted for cotton).

This aid is calculated according to the following table:

Maximum area (total)
440 000 hectares
GreeceSpainPortugal
National base area

370 000 hectares

70 000 hectares

360 hectares

Aid in euros per eligible hectare

300 000 hectares at EUR 594 per hectare
70 000 hectares at EUR 342.85 per hectare

EUR 1 039 per hectare

EUR 556 per hectare

The "approved inter-branch organisations" in the cotton sector are encouraged to participate in the management of area aid for their members (fixing a scale).

Following the cancellation by the Court of Justice of the European Communities of the 2004 reform in September 2006, the current regulations governing the cotton sector will be replaced in the near future. In response to a very wide-ranging public consultation, stakeholders and the general public submitted contributions with a view to drawing up a new proposal for reform.

Olive oil

Support for the olive oil sector has been decoupled from production since 1 January 2006. However, for the upkeep of olive groves of environmental or social value, area aid (corresponding to a maximum of 40 % of the aid previously granted) is granted for olive groves recorded in the geographical information system *.

Only Spain decided to apply coupled aid for olive groves, amounting to EUR 103.14 million per annum.

Member States may assign no more than 10 % of their national envelope for olive oil to measures to improve quality.

The Regulation on the common organisation of the market in olive oil and table olives regulates the internal market and trade in these products with third countries.

Tobacco

Direct aid for tobacco will be fully decoupled from production from 2010. However, in order to protect local economies and to allow the market price to adjust to the new conditions, Member States may maintain a certain percentage of coupled aid (corresponding to a maximum of 60 % of the aid previously granted) for the four years up to 2010.

During this period, and depending on the choice made by the Member States concerned, the maximum amounts of this aid are as follows:

2006-2009
(EUR million)
Germany

21.287

Spain70.599
France48.217
Italy (apart from Puglia)189.366
Portugal8.468

A proportion of this production aid (set at 5 % in 2007) is transferred to the Community Tobacco Fund, which finances research and information programmes on the harmful effects of tobacco consumption.

From 2011, half the aid granted annually for tobacco between 2000 and 2002 (estimated at EUR 484 million) will be transferred for restructuring the tobacco-producing regions under rural development programmes financed under the European Agricultural Guidance and Guarantee Fund, EAGGF.

The Regulation on the common organisation of the market in tobacco regulates production orientation and trade with third countries.

Background

The "Mediterranean products" reform is based on the Commission communication to the Council and the European Parliament entitled "Accomplishing a sustainable agricultural model for Europe through the reformed CAP - the tobacco, olive oil, cotton and sugar sectors ". For hops, the reform is based on the report from the Commission to the Council on evolution of the hop sector .

Key terms used in the act
  • National ceiling: maximum amount which each State may allocate to direct aid payments.
  • Geographical information system: a computerised tool organising geographical data and providing a realistic representation of the spatial environment.

REFERENCES

ActEntry into forceDeadline for transposition in the Member StatesOfficial Journal
Regulation (EC) No 864/20041.5.2004-OJ L 161 of 30.4.2004
Last updated: 05.10.2007

See also

Additional information concerning:

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