Explanatory Memorandum to COM(2010)733 - Agricultural product quality schemes - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2010)733 - Agricultural product quality schemes. |
|---|---|
| source | COM(2010)733  |
| date | 10-12-2010 |
The Quality Package consists of a set of proposals designed to put in place a coherent agricultural product quality policy aimed at assisting farmers to better communicate the qualities, characteristics and attributes of agricultural product, and at ensuring appropriate consumer information. The Quality Package includes:
– a proposal for a Regulation of the European Parliament and of the Council on agricultural product quality schemes [COM(2010) XXXX];
– a proposal to modify Regulation (EC) No 1234/2007 (the single Common Market Organisation) concerning marketing standards for agricultural products [COM(2010) XXXX];
– guidelines setting out best practice for the development and operation of certification schemes relating to agricultural products and foodstuffs [C(2010) XXXX], and
– guidelines on the labelling of foodstuffs using Protected Designation of Origin (PDO) and Protected Geographical Indications (PGI) as ingredients [C(2010) XXXX].
1.1. Grounds for and objectives of the proposal
Farmers and producers of agricultural products face competitive pressure resulting from policy reform, globalisation, the concentration of bargaining power in the retail sector, and the state of the economy. At the same time, consumers increasingly look for authentic products produced using specific and traditional methods. In meeting this demand, the diversity and quality of European Union agricultural production should be an important strength and source of competitive advantage for Union farmers.
However, in order for consumers and buyers to be properly informed about the characteristics and farming attributes of agricultural product, they need to receive accurate and trustworthy labelling information. Providing producers with the right tools to communicate product characteristics and farming attributes to buyers and consumers, and to protect them against unfair trading practices, is at the heart of European Union agricultural product quality policy.
Most tools already exist at European Union level. Analysis and discussion with stakeholders has shown that they may be improved, simplified and made more coherent. The Quality Package aims to improve the Union legislation in the field of quality, as well as in the operation of national and private certification schemes, in order to make them simpler, more transparent and easier to understand, adaptable to innovation, and less burdensome for producers and administrations.
1.2. General context
Since the 1990s, Union agricultural product quality policy has been closely identified with three Union schemes, namely for protected designations of origin and protected geographical indications, for organic farming, and for traditional specialities guaranteed. In addition, Union marketing standards have provided a legislative framework for fair competition and smooth functioning of the market since the inception of the common agricultural policy. These Union standards and schemes have been joined in the last decade by an upsurge in the number of certification schemes in the private sector – seeking to guarantee to consumers value-adding characteristics and attributes, as well as respect for baseline standards through quality assurance certification.
In 2006, in the context of a recast of the scheme for protected designations of origin and protected geographical indications, the Commission committed to undertake a future policy review of the operation of the Regulation and its future development i.
In 2007 a major conference was held bringing together all types of quality schemes: ‘Food quality certification—adding value to farm produce’. The Conference led to the 2008 Green Paper on agricultural product quality i, which elicited over 560 detailed stakeholder responses and provided the input for the Communication on agricultural product quality policy i in 2009. This set out the following strategic orientations:
– improve communication between farmers, buyers and consumers about agricultural product qualities;
– increase the coherence of European Union agricultural product quality policy instruments; and
– reduce complexity to make it easier for farmers, producers and consumers to use and understand the various schemes and labelling terms.
1.3. Existing provisions on this area
European Union legislation provides for protection of designations of origin and geographical indications system in respect of agricultural products and foodstuffs. A harmonised regulatory system in the European Union was created in 1992 to register valuable names of agricultural products and foodstuffs produced according to a specification in a given geographical area by producers with recognised know-how i.
Also in 1992, the scheme for traditional specialities guaranteed set up a register of names of food specialties having a traditional character, stemming either from their traditional composition or traditional production methods used i.
As regards marketing standards, there is an extensive body of legislation that has developed mostly on a sectoral basis, in the form of regulations and directives adopted both at the level of Council and the Commission.
In addition, optional quality terms, regulated within the marketing standards, ensure that terms describing value adding characteristics, or farming or processing attributes are not misused in the marketplace and can be relied on by consumers in identifying different qualities of product.
1.4. Consistency with other policies
Agricultural product quality policy forms part of the common agricultural policy. The recent Communication i from the Commission on policy in the period post-2013 has identified several key challenges including maintaining the diversity of agricultural activities in rural areas and enhancing competitiveness, to which agricultural product quality policy will contribute. The policy also is in line with the priorities for the European Union set out in the 2020 Communication i, in particular the aims of promoting a more competitive economy, as quality policy is one of the flagships of EU agriculture's competitiveness.
This proposal is linked to and consistent with policies on consumer protection and information, single market and competition, as well as external trade policy.
Contents
Consultations
Stakeholders have been widely consulted. The main avenues for consultation were the Advisory Group on the quality of agricultural production, and the Green Paper consultation i, which concluded with a high-level conference in March 2009, organised by the Czech Presidency. The Council of Ministers adopted conclusions i on the Communication in its meeting in June 2009. The European Parliament adopted the resolution, ‘Agricultural product quality policy: what strategy to follow?’ i in March 2010. Opinions were adopted by the European Economic and Social Committee in January 2010 i and the Committee of the Regions in February 2010 i.
2.2. Main outcome of the consultations
Overall, stakeholders welcomed the orientations set out in the 2009 Communication. The main views expressed were the following:
– For designations of origin and geographical indications, simplification of the scheme by merging the two instruments (the ‘protected designation of origin’ and the ‘protected geographical indication’) was opposed. Merger of the existing systems (for wine, spirits, aromatised wines and agricultural products and foodstuffs) was viewed positively by most stakeholders, except for those in the wine and spirits sectors. The Commission was encouraged to further simplify, clarify and streamline the systems, and to enhance international recognition of designations of origin and geographical indications.
– For traditional specialities guaranteed, almost unanimous support was expressed by stakeholders for continuation of the TSG scheme, underlining its potential and importance for producers of traditional product that does not qualify under the geographical indications scheme. Some stakeholders called for the scheme to be simplified, in particular by discontinuing the possibility to register names without reserving it, and streamlined. Stakeholders representing producers of product covered by designations of origin and geographical indications suggested the scheme could provide an outlet for such product particularly where they are used in recipes.
– For marketing standards, in general stakeholders welcomed the simplification of marketing standards, place of farming labelling, and further development of optional quality terms.
– the need to address the needs of small-scale producers for whom the Union designations of origin and geographical indication and traditional specialities guaranteed schemes are too burdensome was raised.
2.3. Impact assessment
Following the 2009 Communication and the main responses to it, two impact assessments were prepared with a view to exploring the options identified in the Communication. These covered designations of origin and geographical indications, and traditional specialities guaranteed.
Concerning geographical indications, the analysis showed strong justification for a Union-level geographical indications scheme and discarded alternatives to a European Union scheme for reasons of low efficiency and effectiveness (including co-regulation and self-regulation by the sector, no action at European Union level, protection through the international Lisbon Agreement i, replacement by a notification system for national geographical indications, and protection through the existing Community collective trade mark). The impact assessment identified considerable ground for reducing complexity and facilitating enforcement by merging the agricultural product and foodstuffs scheme with those in the alcoholic beverages sectors, while assuring the specificities of each system. However, the impact assessment acknowledged the opposition of certain stakeholders to this option.
Analysis of price data showed that producer returns for protected designations of origin (PDOs) and protected geographical indications (PGIs) are higher than for non-designated product and that the PDO label commands a higher price than the PGI label. The overall value of agricultural products and foodstuffs sold under PDOs and PGIs is 14.2 € billion (1997) at wholesale prices, and estimated at 21 € billion at consumer prices. Concerning trade in the internal market, 18.4% of PDO and PGI products are marketed outside their Member State of production.
The impact assessment found that merging the instruments for protected designation of origin (PDO) and protected geographical indication (PGI) would diminish the added-value benefits of the PDO identification. Concerning environmental impacts, studies show that some PDO and PGI products come from low intensity farming systems associated with high environmental value. These PDOs and PGIs provide an economic underpinning to the environmental public goods. Under the options retained for analysis producers can include environmental conditions in appropriate cases.
Concerning traditional specialities guaranteed, three options were analysed: introducing the term traditional as optional quality term and abolishing the current scheme; no EU action; and simplifying the current scheme (allowing only registration with reservation of the name). The impact assessment showed that eliminating the TSG scheme would lead for protected names to loss of the economic and social benefits of EU-wide protection and was found to be unacceptable to stakeholders and to the EU legislator. In addition, the option to protect names throughout the single market was identified as a function that can only be undertaken effectively at Union level. The current low uptake of the traditional speciality guaranteed (TSG) scheme meant that data was limited. Case studies and surveys show positive economic and social impacts, including the preservation of traditional forms of production, access to derogations from hygiene rules for traditional methods, and value adding economic benefits of TSG registration.
Concerning the non-protected names however, little economic or social impact was shown for the abolition option as this function could be taken up by national or regional schemes and is already successfully achieved by several national schemes; the case for Union action in this regard was therefore difficult to justify on grounds of subsidiarity.
In social terms, the designations of PDO, PGI and TSG were found to contribute to the continuation of traditional forms of production to the benefit of both producers and consumers.
However, both the impact assessments for geographical indications and for traditional specialities guaranteed highlighted the widespread failure of these schemes to attract participation of very small-scale producers, notwithstanding that small-scale producers are often associated with artisanal product, traditional methods and local marketing, the European Union schemes are seen as burdensome in terms of application, necessitate costly controls, and require adherence to a specification. Therefore, further study and analysis will be carried out in order to assess the problems faced by small-scale producers in participating in Union quality schemes. On the basis of the results of this analysis, the Commission may propose appropriate follow-up.
Concerning marketing standards, in addition to the impact assessment work already done in the context of the 2009 Communication, further impact assessment work will be associated as appropriate to the proposals on the specific standards in the context of delegated powers for which a legal framework has been provided within the alignment of Regulation 1234/2007 to the Treaty of Lisbon.
The texts of the impact assessments can be found on the following website:
ec.europa.eu/ agriculture/quality/policy/backdocuments-links/index_en.htm
3.1. Summary of the proposed action
The single Regulation for agricultural product quality schemes presents three complementary schemes (designations of origin and geographical indications; traditional specialities guaranteed; optional quality terms) in a single regulatory structure, overseen by a single quality policy committee. A separate Regulation covers the Marketing Standards.
3.1.1. Designations of origin and geographical indications, excluding wines, aromatised wines and spirits.
The proposal maintains and reinforces the scheme for agricultural products and foodstuffs, but does not bring together the geographical indications schemes for wines, for spirits, or for aromatized wines. In the light of relatively recent reforms of the wine and spirits legislation, at this stage, the schemes should remain distinct. This issue can be reconsidered at a later date. In the meantime, the rules for the scheme for agricultural products and foodstuffs will be converged, where appropriate, to those for wines.
The main elements designed to strengthen and simplify the scheme are the following:
– recognition of the roles and responsibilities of groups i applying for registration of names with regard to monitoring, promotion and communication;
– the reinforcement and clarification of the level of protection of registered names and the common Union symbols;
– the procedure to register names is shortened;
– the respective roles of Member States and groups applying for registration have been clarified with regard to the enforcement of protection of the registered names throughout the European Union, and
– the definitions of designations of origin and geographical indications are more closely aligned to international usage.
The proposal streamlines the current process of registration of designations of origin and geographical indications by shortening time delays. In addition, certain legal issues are clarified and terminology aligned with the recently adopted legislation on geographical indications for wine. Minimum common rules on official controls to ensure product follows the specification and to ensure correct labelling in the marketplace are also laid down. The scope of the Regulation is maintained (agricultural products for human consumption and certain other products), while dark chocolate is added.
3.1.2. Traditional specialities guaranteed
The proposal maintains the scheme for reservation of names of traditional specialities guaranteed across the European Union, but discontinues the option of registering names without reservation. The function of giving publicity, but not protection, to traditional products is best accomplished at national (or regional) level, and European Union action cannot be justified. The renewed European Union scheme for traditional specialities guaranteed is simplified (registration process streamlined by shortening delays, procedures aligned on PDO-PGI ones) and targeted in several respects: the criterion of tradition is extended to 50 years (from 25 years) to reinforce the credibility of the scheme; the scheme is restricted to prepared meals and processed product; and definitions and procedural requirements are substantially simplified to improve understanding of the scheme.
3.1.3. Optional quality terms
Concerning the optional quality terms, which have in common with the quality schemes that they are optional and assist farmers to identify value-adding characteristics and attributes of product in the marketplace, it is proposed to bring these into the present regulation. The optional quality terms are not amended in content, but adapted to the legislative framework of the Treaty on the Functioning of the European Union.
Further study and analysis will be carried out in order to assess the problems faced by producers of mountain products in labelling their products on the market. On the basis of the results of this analysis, the Commission may propose appropriate follow-up.
3.1.4. Marketing standards
Following the Communication from the Commission on agricultural product quality policy and subsequent debates, it is clear that marketing standards can contribute to improving the economic conditions for the production and marketing as well as the quality of such products. A minimum requirement of 'sound, fair and marketable' already exists in market management measures. Extending these minimum requirements to those products not covered by specific standards can be useful for reassuring the consumers about the basic quality of the products they buy.
The proposal also takes into account the necessity of the alignment to the Treaty on the Functioning of the European Union, and thus the powers to adopt and develop standards in future will be delegated to the Commission.
Under this new framework, a legal basis for compulsory labelling of place of farming will be introduced for all sectors. This allows the Commission, following appropriate impact assessments and on a case by case basis, to adopt delegated acts concerning possible mandatory labelling on place of farming at the appropriate geographical level in order to satisfy the consumers' demands for transparency and information. One of the first sectors to be examined will be the dairy sector. At the same time the Commission envisages that for the future the mandatory indication of origin, for those sectors in which it already exists, will be maintained.
3.2. Legal basis (if necessary, justify choice of legal basis)
Treaty on the Functioning of the European Union, Article 43 i, and for Title II also Article 118 i.
3.3. Subsidiarity and proportionality principles
Concerning subsidiarity, the schemes for designations of origin and geographical indications, traditional specialities guaranteed and optional quality terms, provide for the protection or reservation of value-adding names and terms throughout the territory of the European Union. This has the effect that non-qualifying producers are constrained from using the terms. If protected by Member States individually, the terms and names would enjoy different levels of protection in each Member State, which could mislead consumers, impede intra-Union trade, and make way for unequal competition in marketing products identified by quality names and terms. The determination of such rights across the European Union can only be done effectively and efficiently at Union level. 18% of the value of products sold under the PDO and PGI scheme are traded outside their Member State of origin and rely on the intellectual property protection afforded by EU-wide scheme. For the protected names under the TSG scheme, sales in the internal market are significant for the producers concerned. Optional quality terms also apply to significant intra-Union trade flows and divergent definitions and meanings would impede the operation of the market.
The schemes for designations of origin and geographical indications, and traditional specialities guaranteed rely on Union symbols designed to convey information about the nature of each quality scheme. In order to ensure recognition of the symbols by consumers across the European Union, and thereby facilitate understanding of the scheme and trade in quality products across boarders, the symbols need to be established at Union level.
The processing and analysis of applications for designations of origin and geographical indications and traditional specialities guaranteed is a task that need not be performed at European Union level, except in so far as certain elements are concerned. These include assessing eligibility for the protection of names across the European Union, upholding the rights of prior users of the names (especially those outside the Member State of application), and checking applications for manifest errors. The primary detailed analysis of an application however, can be more efficiently and effectively undertaken at national level.
The operation of labelling schemes designed to identify product having certain qualities, but which do not effect the protection or reservation of names across the European Union, can be most effectively done by national authorities. For this reason the proposed revision of the traditional specialities guaranteed scheme discontinues the option to register names that are not protected.
The task of controls of all schemes is, in line with Regulation (EC) No 882/2004 on official feed and food controls, to be undertaken in the first place under the responsibility of national competent authorities. Supervision of Member State control activities needs to be undertaken at Union level in order to maintain credibility in the food law schemes across the European Union, in line with the principles laid down in that regulation.
Concerning proportionality, the schemes for designations of origin and geographical indications and for traditional specialities guaranteed entail adherence to a strict product specification and effective controls on production that can be burdensome for producers. However, this is necessary and proportionate to underpin the creditability of the scheme and provide the consumer with an effective guarantee of compliance. Without that guarantee, the consumer cannot be expected to pay a fair price for the quality products offered. By contrast the schemes for optional quality terms rely primarily on producers’ own declarations of conformity, backed up by normal agricultural controls by Member States, based on risk assessment. As the conditions of participation in these schemes are lighter than in the case of the designations of origin and geographical indications and traditional specialities guaranteed, the less-burdensome system of participation and controls is proportionate.
The quality schemes are an essential part of the strategy of development of the common agricultural policy to enable and encourage European Union farmers to develop their expertise in marketing high quality product that has value adding characteristics and production attributes. As such it is vital that all farmers have access to the schemes. Therefore, while farmers must make a considered choice to take on the burdens and commitment to market quality product under the schemes, equally the policy benefits for the agricultural sector and for consumers can only be achieved if every farmer who wishes, has access to the schemes. For this reason, it is proportionate to the objective that the schemes must be applied by each Member State throughout their territories.
3.4. Choice of instruments
The proposal for a Regulation of the European Parliament and of the Council on agricultural product quality schemes replaces existing Council Regulations (EC) No 509/2006 and (EC) No 510/2006, and incorporates existing provisions relating to optional quality terms currently in Council Regulation (EC) No 1234/2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products i and in Directive 2001/110/EC related to honey i.
The regulation is accompanied by a parallel legislative proposal for marketing standards comprising a European Parliament and Council Regulation modifying Council Regulation (EC) No 1234/2007 aligned to the rules of the TFEU.
None of the European Union schemes have budgetary implications.
However, it has been shown necessary for the Commission to take a more active role to protect the names of the quality schemes and the Union symbols, particularly in third countries. To achieve this, additional budgetary resources are necessary. They are shown in the financial statement.
5. OPTIONAL ELEMENTS: SIMPLIFICATION
The proposed regulation simplifies administration of the schemes by bringing different quality schemes for agricultural products as well as the optional quality terms, into one legislative instrument. It ensures coherence between the instruments and makes the schemes more easily understandable for stakeholders. The proposal clarifies and simplifies provisions for Member States, which are primarily responsible for the implementation and control of the schemes.
The main elements of simplification are:
– combination where possible of rules for application processes and controls, with benefits in terms of coherence of rules across schemes, ending current divergences in procedures;
– procedures are shortened and streamlined where possible;
– clarifications are introduced in particular in relation to intellectual property rights;
– simpler concepts more easily understood by consumers are introduced, notably in the traditional specialities guaranteed scheme;
– a single committee (the quality policy committee) is established for all schemes. This replaces two committees currently operating for the schemes for designations of origin and geographical indications, and for traditional specialities guaranteed.
For marketing standards, the proposed modification of Regulation (EC) No 1234/2007 will represent a simplification in terms of procedures and it will increase the transparency as far as marketing standards provisions are concerned.