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MEMO/06/336

Brussels, 20 September 2006

POSEI: The preferred Option for Bananas

The POSEI programme:

Agriculture in the EU´s outermost regions benefits from the POSEI arrangements ("Programme d'Options Spécifiques à l'Èloignement et l'Insularité"), which are designed to take account of their geographical and economic handicaps. The outermost regions (as identified in Art 299.2 of the Treaty) are:

  • France : La Réunion, Guadeloupe, Martinique, Guyane
  • Portugal: Azores, Madeira
  • Spain: Canary Islands

The POSEI measures, which are funded under the 1st pillar of the CAP, fall into two categories: arrangements for the supply of essential products for human consumption, for processing, and as agricultural inputs, and specific measures to support the production and marketing of local agricultural products.

A reform of these arrangements, currently being implemented, will involve a shift from micro-management of measures by the Commission towards greater regional participation, decentralisation and flexibility in decision-making, on the basis of programmes presented by Member States for approval by the Commission.

The programmes are to be financed from national envelopes established by the Council Regulation on POSEI reform. As in the past, the measures will be 100 % funded by the EU.

More detailed information on POSEI reform can be found in the relevant legislation:

Council Regulation 247/2006 and Commission Regulation 793/2006

POSEI and bananas

Community bananas account for only 16% of total EU supply. Except for a few quantities (2%) produced in Cyprus, Greece and Portugal, they are produced in the four outermost regions (see explanation above) situated in sub-tropical areas: the Canary Islands, Martinique, Guadeloupe and Madeira.

Following the extension of the CMO in bananas to the 10 new Member States in 2005 and prior arrangements concluded in 2001 with Ecuador and the USA, the European Commission decided in 2005 to propose a reform of the internal aspects of the banana CMO in 2006, paying particular attention to the aspects governing the granting of aid to European producers.

On the basis of the main political priorities set up by the Sustainable Development and the Lisbon Strategies, as transposed in the objectives of the reformed CAP, the Commission proposes to abolish the current aid scheme in the CMO and replace it with an increase in the budget allocation for the POSEI arrangements for supporting agriculture in the outermost regions; POSEI would thus become the only market support instrument for bananas in those regions. The cash currently spent on banana production in mainland Europe would be integrated into the Single Farm Payment system.

The POSEI arrangements seem best suited to support banana production in each of the regions concerned, as they would allow the Member States concerned to propose measures in the framework of their overall support programmes that take account of regional particularities.

It is proposed to increase the budgetary allocation under Title III of Regulation (EC) No 247/2006 by a total amount of EUR 278.8 million in order to fully include Community support to banana producers in those programmes as of 1 January 2007, hence reinforcing the coherence of the strategies for support of agricultural production in these regions.

Background on outermost regions (OR)

What is an OR?

The European Union has seven outermost regions, areas that are geographically remote from the European continent but fully part of the EU in terms of exercise of Community rights and obligations. They are:

  • The four French Overseas Departments: Martinique, Guadeloupe (group of Caribbean islands), French Guiana (Amazon Forest region in South America bounded by Suriname and Brazil) and La Réunion (one of the Mascarene Islands in the Indian Ocean);
  • The Portuguese Autonomous Regions of the Azores (group of nine islands) and Madeira (group of two islands), both in the North Atlantic Ocean;
  • The Spanish Autonomous Community of the Canaries (group of seven islands in the Atlantic Ocean);

What are their specific handicaps?

Their handicaps are multiple and permanent and in combination are a severe brake on development.

Article 299(2) of the EC Treaty lists the following:

  • remoteness;
  • insularity;
  • small size;
  • difficult topography and climate;
  • economic dependence on a few products.

Their being nearly all islands and their tropical climate, frequently volcanic and rugged terrain, distance from the European Continent and proximity to less developed countries are all obstacles to development. Moreover their population density is, except for French Guiana, relatively high but their demographic, economic and territorial weight is very low in the Union as a whole.

Other structural handicaps are their:

  • fragmentation;
  • isolation;
  • small local markets;
  • high unemployment rates.
  • Difficulties of achieving economies of scale and of making big investments pay, unemployment rates – in most cases very high, particularly among young people –and their low income levels make the ORs some of the least developed regions of the Union.

What is their status?

In contrast to the Overseas Countries and Territories, these regions are an integral part of the Union and under the Amsterdam Treaty their specific characteristics are to give rise to differentiated treatment in various sectors.

The ORs give the Union both a very widely spread set of maritime territories and an even more diversified economy, for example by supplying agricultural products such as bananas, rum, cane sugar, and other exotic fruits and vegetables in demand by European consumers. They present enormous opportunities and are a valuable asset in European relations with adjacent countries. They are also attractive in certain research and high technology fields: Astrophysics Institute in the Canaries, European Space Agency in French Guiana, Oceanography and Fisheries Department of the University of the Azores, etc.


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