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Assistance for traditional ACP suppliers of bananas

From 1994 to 2008, the European Union (EU) provided temporary technical and financial assistance for traditional suppliers of bananas from African, Caribbean and Pacific (ACP) states. This assistance was intended to enable them to adapt to the new market conditions in the banana sector and to help beneficiary countries to be more competitive and/or to diversify their economies.

ACT

Council Regulation (EC) No 2686/94 of 31 October 1994 establishing a special system of assistance to traditional ACP suppliers of bananas.

Council Regulation (EC) No 856/1999 of 22 April 1999 establishing a special framework of assistance for traditional ACP suppliers of bananas.

SUMMARY

Traditional African, Caribbean and Pacific (ACP) suppliers of bananas have benefited from a framework of assistance to improve the competitiveness and diversification of their agricultural production.

The term traditional ACP suppliers of bananas does not refer to all current ACP suppliers of bananas. The countries involved (defined according to historical references) are: Belize, Cameroon, Cape Verde, Côte d'Ivoire, Dominica, Grenada, Jamaica, Madagascar, Saint Lucia, Saint Vincent and the Grenadines, Somalia and Suriname.

Within the meaning of the Regulation, the term "bananas" means fresh or dried bananas, excepting plantains.

The temporary special framework of assistance (SFA) is established by Regulation (EC) No 856/1999 for a period of ten years with effect from 1 January 1999.

Activities eligible for assistance

The assistance measures aim to:

  • increase productivity and improve product quality, including in the field of plant health;
  • adapt production, distribution or marketing methods, particularly in the context of the standards provided for in Regulation (EEC) No 404/93 and (EC) No 1234/2007;
  • establish producers' organisations to improve the marketing and competitiveness of their products;
  • develop fair trade, and systems of certifying environmentally-friendly production methods;
  • develop a production and/or marketing strategy to meet the requirements of the market;
  • assist with training, market intelligence and the development of environment-friendly and fair production methods;
  • support the diversification of production where improvement in the competitiveness of the sector is not sustainable.

Financing programmes

The financial assistance provided is designed to complement and reinforce the assistance provided under other instruments of development cooperation. Each year, the Commission fixes the maximum amount available to each supplier on the basis of the competitiveness gap observed and the scale of banana production of the country concerned.

The Regulation provides for mechanisms to reduce Community aid gradually. From 2004, a maximum reduction coefficient of 15 % will be applied each year to the level of assistance made available to each country. When programmes are implemented, this reduction coefficient will be reduced to an extent equivalent to the increase in competitiveness observed.

The projects financed under the "bananas" budget heading were devolved to the Commission delegations in the last quarter of 2005. This devolution has enabled the delegations to manage projects more effectively and to catch up on any commitment or payment backlogs.

Evaluation

The Commission was required to present a report to the European Parliament and the Council on the operation of the Regulation by 31 December 2000 and every two years thereafter.
It presented its first two-yearly report in February 2001, and the second in December 2002.

Context

Since the common market organisation (CMO) in bananas was established in 1993, ACP states have benefited from a preferential trade regime for exporting bananas to the EU. As such:

  • from 1993 to 2005 imports of bananas from non-ACP states were subject to quotas and customs duties. ACP states were not subject to customs duties within quota and benefited from reduced customs duties for imports above the quota;
  • in 2006 the general imports system was replaced by a system based only on customs duties, except for ACP states which benefited from a quota system exempt from customs duties;
  • since 2008, the ACP states which have negotiated an Economic Partnership Agreement (EPA) have benefited from access to the market without quotas or customs duties. The EPAs replace the trade provisions of the Cotonou Agreement which expired on 31 December 2007;
  • since 15 December 2009 customs duties applicable to imports from third countries (non-ACP states) have been EUR 148/tonne.

The special framework of assistance for ACP suppliers established in 1999 came to an end in 2008; however a number of projects are still underway.

REFERENCES

ActEntry into forceDeadline for transposition in the Member StatesOfficial Journal
Regulation (EC) No 2686/94

5.11.1994

OJ L 286 of 5.11.1994

Regulation (EC) No 856/1999

30.4.1999

-

OJ L 108 of 27.4.1999

RELATED ACTS

Council Decision 2010/314/EU of 10 May 2010 on the signing and provisional application of the Geneva Agreement on Trade in Bananas between the European Union and Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru and Venezuela and of the Agreement on Trade in Bananas between the European Union and the United States of America.

Commission Regulation (EC) No 1609/1999 of 22 July 1999 laying down the detailed rules for the implementation of Council Regulation (EC) No 856/1999 [Official Journal L 190 of 23.7.1999].
This Regulation lays down the detailed rules for the implementation of the special framework of assistance, for example the deadlines, the methods for calculating the reference price, the reference quantities and the competitivity gap.
Requests for assistance should be based on a coherent long-term strategy for the banana sector. Programmes submitted should be drawn up on the basis of this strategy and take the form of annual action plans. Funds allocated to countries which have not presented a request for assistance within the specified deadline shall be distributed to other countries.

REPORTS

Communication from the Commission to the Council and the European Parliament of 17 March 2010 - Biennial Report on the Special Framework of Assistance for Traditional ACP suppliers of Bananas [COM(2010) 103 final – Not published in the Official Journal].
The special framework of assistance (SFA) came to an end on 31 December 2008. Its implementation enabled traditional ACP suppliers of bananas to make progress in terms of:

  • competitiveness and adaptation to the needs of the European market and to EU standards and policies with the aim of sustainable economic development;
  • diversifying agricultural production and including it in the planning of the development of the country in a more integrated and strategic way.

However, the majority of these states remain vulnerable to external crises and must still overcome significant challenges to adapt to the constraints of world trade.

Communication from the Commission to the Council and the European Parliament –Special Framework of Assistance for traditional ACP Suppliers of Bananas (Council Regulation No 856/1999): Biennial Report from the Commission 2006 [COM(2006) 806 – Not published in the Official Journal].

Communication from the Commission to the Council and the European Parliament – Special Framework of Assistance for Traditional ACP Suppliers of Bananas (Council Regulation (EC) No 856/1999): Biennial Report from the Commission – 2004 [COM(2004) 823 final – Not published in the Official Journal].
The EU trade regime has not changed since the last report and measures have been taken as part of enlargement.

Communication from the Commission to the Council and the European Parliament of 23 December 2002 – Special Framework of Assistance for Traditional ACP Suppliers of Bananas (Council Regulation (EC) No 856/1999): Biennial Report from the Commission – 2002 [COM(2002) 763 final - Not published in the Official Journal].
In April 2001 the Community prepared a new regime in order to comply with WTO rules, putting an end to the "banana conflict" between the United States and the European Community. The amended regime is a compromise and contains major, phased changes to EU banana import arrangements:

  • the quota system should be replaced by a tariff-only system;
  • in the meantime, the EU market in bananas will continue to be managed through a quota system based on historical reference, which has also been discussed with the ACP countries.

In particular, the Commission notes that between 1999 and 2002 the amounts used to boost the productivity of banana plantations have declined, compared with those aimed at supporting diversification. These changes correspond to the Commission’s desire to improve the management of funds, in particular regarding transparency, security and identification of the various stakeholders' responsibilities.

Communication from the Commission to the European Parliament of 7 February 2001 - Special Framework of Assistance for Traditional ACP Suppliers of Bananas (Council Regulation No 856/1999) - Biennial Report from the Commission 2000 [COM(2001) 67 final - Not published in the Official Journal].
Market conditions were difficult for the traditional ACP suppliers of bananas in 1999 and 2000. The market is dominated by cheaper bananas from Latin America. In addition, banana prices fell in 1999 and plummeted to an exceptional low in 2000. Furthermore, following the WTO's unfavourable conclusions on the Commission's import regimes in 1999, the Commission made significant changes to the import regime.

Last updated: 24.06.2010
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