Explanatory Memorandum to COM(2014)32 - Amendment of Regulations (EU) No 1308/2013 and 1306/2013 as regards the aid scheme for the supply of fruit and vegetables, bananas and milk in the educational establishments - Main contents
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| dossier | COM(2014)32 - Amendment of Regulations (EU) No 1308/2013 and 1306/2013 as regards the aid scheme for the supply of fruit and vegetables, ... |
|---|---|
| source | COM(2014)32  |
| date | 30-01-2014 |
The Regulation (EU) No 1308/2013 of the European Parliament and of the Council (single Common Market Organisation Regulation) provides for a legal and financial framework governing the distribution of selected agricultural products to children in schools through the School Milk Scheme and the School Fruit Scheme.
The two schemes have developed independently and in different time periods. The School Milk Scheme dates back to the creation of the Common Market Organisation for milk in 1968 and has been actually implemented since 1977. The School Fruit Scheme is a more recent programme that came out as a political commitment in the context of the 2007 reform of the Common Market Organisation for fruit and vegetables. The current schemes operate within different legal and financial frameworks, and have some important differences in their design and functioning.
Both school schemes were established in order to promote the consumption of fruit and vegetable and milk products, which are important sectors for the European agriculture, each representing approximately 15% of the value of European Union (EU) agricultural output. Besides their economic importance, they are beneficial in the public health context and are suitable for the distribution to school children.
The rationale which led to the establishment of the two school schemes is still relevant in the current context of declining consumption of fruit and vegetables and milk products. Despite different health and agricultural promotion efforts both at the national and EU level to increase the consumption, the declining trends have not been reversed, particularly for fresh fruit and vegetables and drinking milk. This situation is exacerbated amongst others by the modern consumption trends towards highly processed foods which are often high in added sugars, salt and fat, and will be boosted by younger age groups.
Despite the positive embedding of the current schemes in schools and the acknowledgement of their relevance, conclusions drawn from different reports and external evaluations highlight certain weaknesses in their design and inefficiencies in their functioning.
The CAP 2020 already contains important elements that are expected to solve some of the identified problems, in particular through significant changes to the financing of the School Fruit Scheme and strengthening of its educational dimension. The new requirement under the Scholl Milk Scheme that participating Member States should draw up a strategy will help focus the implementation of the scheme, as it is already the case for School Fruit Scheme. However, the Commission CAP 2020 proposal was adopted before the external evaluations of the current schemes were finalised and it preceded also the European Court of Auditors (hereinafter ECA) report.
The proposal aims not only to address the endogenous problems inherent to the functioning of the schemes in order to increase their efficiency and effectiveness, but it also aims at providing a more unified policy response to ensure that they are capable of meeting the long-term objectives and effectively respond to the external challenges. This is in line with the ECA recommendation that 'there should be greater coordination and synergy between the two schemes in order to ensure a globally consistent approach to nutrition and that the programmes are managed efficiently'. With this proposal, the Commission also responds to the reporting obligation stemming from Article 225(c) of the Regulation concerning the possibility of extending the scope of the school schemes to include olive oil and table olives.
Firstly, the proposal aims to refocus the current set-up towards the long-term objectives, with a view of strengthening the educational dimensions of both schemes, and to contribute to reconnecting young citizens with food and its source, thus enhancing perceptions of agriculture and its products, the CAP and the EU. Currently, there is a gap between the design of the schemes and these objectives, as the latter are addressed differently in the two schemes. The educational dimension was built into the School Fruit Scheme from the beginning, while the School Milk Scheme does not oblige Member States to use specific educational measures, making the link between the products distributed and the scheme low. Furthermore, the evaluation and monitoring system of the School Milk Scheme is weak, while the system of the School Fruit Scheme needs improvements, which is important for measuring their medium- or long-term effectiveness.
Secondly, the goal is to unify and consolidate the current separate legal and financial frameworks and increase the visibility of the EU intervention, in order to ensure a globally consistent CAP approach to school distribution and maximise the management efficiency. As the current schemes have developed independently and in different time periods, there is a lack of coordination and consistency between them, even though they pursue similar objectives and target groups. The current fragmented system entails a multitude of different approaches and messages, which could negatively impact the effectiveness of the regime as a whole. This problem stems from the different legal and financial frameworks, market differences between the products involved and decisions at Member State level on how to implement the two schemes.
Last but not the least, there is a need to increase the efficiency of the spending dedicated to the promotion of the consumption of agricultural products in schools, where the financial potential of the schemes would be better targeted to maximise their impact and the cost-effectiveness of distribution would be increased. Some of the current deficiencies are common (such as a high administrative and organisational burden), while others are specific either for the School Fruit Scheme (most notably the under-execution of around 30% of its potential as well as huge disparities in the costs for products involved in the distribution) or for the School Milk Scheme (potential deadweight effect, low cost-benefit ratio).
Contents
The review of school schemes started in October 2012.
During the Impact Assessment process, a public consultation was conducted, inviting interested parties to contribute to the review. The public consultation process was based on a consultation document that was structured around 9 open-ended questions. The consultation ran for 12 weeks and was conducted on the basis of an online questionnaire. In addition, separate meetings and hearings were organised in the course of the process, including stakeholders meeting on 15 March 2013.
The three scenarios elaborated in the Impact Assessment are 1) 'status quo' option that maintains the separate frameworks for the school distribution but integrates the improvements made to the school schemes by CAP 2020; 2) an 'adjustment' scenario that explores whether the objectives of the review could be achieved within the current separate setting but through the measures/changes aimed at bridging the gap in the educational dimensions of the current schemes, increasing the synergies between the two schemes, further simplification and improvements to the programmes beyond CAP 2020; and 3) a 'new framework' scenario that entails a considerable policy change in the form of common legal and financing framework for the distribution of a restricted number of products, complemented by the orientation towards the long-term objectives through the strengthened educational dimension of the scheme.
On the basis of the evaluations of the current policy frameworks and the analysis of future challenges and needs, the impact assessment evaluates and compares the impacts of these three alternative policy scenarios against their potential to achieve the objectives, and in terms of effectiveness, efficiency and coherence with over-arching objectives:
– The status quo scenario, with a strengthened School Fruit Scheme, would further exacerbate the existing gaps in the educational dimension between the School Fruit Scheme and the School Milk Scheme and not bring much in terms of management efficiency. It also brings a limited contribution in providing a uniform and visible EU intervention. Whilst budgetary neutral, it contains certain budgetary uncertainty with no limitation on the School Milk Scheme funding. It keeps the high level of administrative burden compared to the benefits (low cost-benefit), strong variations in efficiency due to high disparities in costs of products for the School Fruit Scheme and continued potential deadweight effect in the School Milk Scheme. There are doubts whether this option could provide a suitable response to some of the emerging challenges related to the consumption patterns and demand for fresh agricultural products. It has been seen as having a limited contribution to horizontal objectives of better regulation and simplification, while it scores better with its potential in contributing to public health objectives of reducing health inequalities through national strategies and targeting.
– On the other hand, the main impacts arising from the adjustment option are expected to come through the strengthening of School Milk Scheme educational dimension and synergies in the implementation of both schemes, whilst keeping the current separate setting. This would provide better contribution to the long-term objectives of sustainably increasing the demand these agricultural products and shaping healthier eating habits. It is positive as regards the increased synergies but these are limited due to different financial arrangements between the schemes. Lower administrative burden brings more benefits, lower complexity through synergies and common procedures.
– New framework option shifts the focus of the current school regime towards a set-up with measures that better fulfil the long-term objectives of the schemes and it bridges the gaps in the design that currently exist between the two schemes. It furthermore gives greater flexibility to Member States to manage the school programme and focus their actions based on priority needs, with a necessary budgetary flexibility to operate between different financial entitlements and respond to changing situations. Additionally, it is designed to give the greatest impact of school intervention within a fixed budget. It eliminates the uncertainties linked to the EU budget, as it sets a fixed annual limit for the school intervention, which reflects the current (CAP 2020) absorption potential. With improved financing arrangements and conditions for participation, the existing potential could be used with greater efficiency.
On this basis, the Impact Assessment concludes that the 'new framework' scenario is the most balanced in progressively refocusing the school schemes regime towards the long-term goals, enabling them to better respond to the overarching problems of declining fruit and vegetable and milk consumption and rising obesity, and establishing a critical link with agriculture a variety of its products.
Simplification has been an important consideration throughout the process and should be enhanced in several ways, most of which will come notably through the simplification on the basis of Commission acts where certain requirements will be merged or removed.
It is proposed to establish a common legal and financial framework for the distribution of fruit and vegetables and milk to children in schools, supported by strengthened educational measures to reaffirm the link with agriculture and a variety of its products, as well as wider issues such as public health and environmental matters. The new framework would be budget neutral and would operate within the budget foreseen for the schools schemes under CAP 2020. The structure of the new scheme is built largely on the existing elements of the two schemes which are considered as well-functioning and efficient.
The proposal is based on Articles 42 and 43 of the Treaty. It complies with the principles of subsidiarity and proportionality whereby the framework for action and the basic principles are set at the EU level, whilst Member States still have the leeway to tailor the scheme based on their priorities and in line with national/regional specificities, and to set their targets and implementation modalities.
The key elements of the new proposal are the following:
– Refocus the distribution: it is proposed to focus the distribution of products in schools to two 'core products': fresh fruit and vegetables (including bananas) and drinking milk only, with the fat content of drinking milk to be decided upon by national health authorities. This focus would be beneficial for several reasons, especially since the distribution would take place within a fixed budget, it would reduce organisational burden for schools, and is in line with the need to help reverse the declining consumption trends for these two groups of products. Additionally, this would be in line with the overall practice, as fresh fruit and vegetables and drinking milk are the most distributed products under the current schemes. However, Member States could include also a wider variety of agricultural products in the framework of the thematic educational measures.
– Unify the financial provisions and improve financing conditions in order to increase the efficiency of spending:
– Considering the differences between the products and their supply chains, as well as the different consumption situation across the Member States, separate 'envelopes' would be allocated to Member States for fruit and vegetables (including bananas) and milk. An envelope for the fruit and vegetables in line with the CAP 2020 budget (EUR 150 million) and an envelope for milk corresponding to the expected use of funds (EUR 80 million). Certain flexibility would be provided for, where Member States could transfer limited shares of their allocations between the envelopes based on their needs (prioritising of intervention through strategies). Within those envelopes, thresholds would be established for supporting measures and other eligible measures, such as evaluation, monitoring and communication.
– Based on the experience so far, the level of EU contribution towards the price of products would be limited through a maximum EU aid per portion for fruit and vegetables and for milk, and not through the EU co-financing levels as was so far the case for the School Fruit Scheme. This would be a new element for fruit and vegetables, which would help alleviate the huge disparities in the price for products distributed and would imply a simplification in terms of a management. The level of EU subsidy for the milk would be increased in order to reduce the deadweight effect (by enabling the distribution free of charge or close to it) and increase the cost-benefit of distribution. These elements of the proposal respond to the commitment undertaken by the Commission in the context of the adoption of the Council Regulation (EU) No 1370/2013[3] to review the financing arrangements of the current schemes, namely the aid for the distribution of milk as well as the co-financing of the school fruit scheme costs. Member States will be allowed to continue providing national top-ups or attract private funding in order to enlarge the scope and/or the intensity of their intervention of the school schemes.
– Reinforce the educational dimension: supporting educational measures would become a requirement also for the milk distribution, thus bridging the gap between the current schemes. These measures would have a strong educational dimension, with a focus on agricultural issues, nutrition/health (balanced diets) and environment maters. In addition, they would provide a critical instrument to (re)connect the children with food, agricultural production and farmers. Educational measures should target the school population and if possible involve the family and community as well and address the wider issue of the existing offer of healthy options of food and beverages at schools. They are useful as evidence shows that many children grow up not knowing where their food comes from – where and how it is produced and what are products of certain seasons. Member States could therefore choose thematic educational measures that could occasionally include also agricultural products, other than the two core products, such as for example yoghurts, processed fruit and vegetables, honey, olive oil, and similar. The list of all products supplied under the scheme and their nutritional aspects have to be approved by national health authorities. Supporting educational measures would have to be directly linked to the agricultural objectives of the scheme and be in line with the objective of promoting healthy diets.
The impact of the proposal is budgetary neutral compared to the status quo. For fruit and vegetables, the budgetary ceiling currently set in the Regulation No 1308/2013 (EUR 150 million per school year) is maintained in this proposal. For milk, the proposal includes an envelope of EUR 80 million per school year, corresponding to the expected budget execution and in line with the overall amounts for market-related expenditure and direct aids taken into account in the Multiannual Financial Framework 2014-2020.
As regards the distribution of expenditure, the highest support will be given to the distribution and supporting educational measures. Other costs, such as evaluation, monitoring and communication, will also be eligible to a more limited extent. The ceilings for the costs of supporting educational measures and for other related costs will be set by the Commission in light of the experience with the current programmes.
Details on the budgetary and financial implications are provided in the legislative financial statement accompanying the proposal.