Explanatory Memorandum to COM(2014)180 - Organic production and labelling of organic products, amending the Official controls Regulation - Main contents
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| dossier | COM(2014)180 - Organic production and labelling of organic products, amending the Official controls Regulation. |
|---|---|
| source | COM(2014)180  |
| date | 24-03-2014 |
Over the last 10 years the organic market has been characterised by dynamic development driven by strong growth in demand. The global world market for organic food has expanded fourfold since 1999. The area under organic production in the European Union (the Union) has doubled. Each year 500000 ha of land are converted to organic farming. However, neither internal supply nor the legislative framework has kept up with this market expansion. Production rules do not sufficiently take into account evolving consumer and citizen concerns and expectations; labelling rules are complicated; weaknesses in the control system and in the trade regime have been identified. The legislation is complex and entails a high level of administrative burden which is stopping small farmers from joining the Union's organic scheme. Some of the exemptions that were needed for the development of the sector seem no longer to be justified.
The proposal aims at improving the legislation on organic production with the objectives of:
removing obstacles to the sustainable development of organic production in the Union,
guaranteeing fair competition for farmers and operators and allowing the internal market to function more efficiently,
maintaining or improving consumer confidence in organic products.
When adopting Council Regulation (EC) No 834/2007 on organic production and labelling of organic products, the Council earmarked a series of issues on which the Commission was required to submit a report to the European Parliament and the Council, after having reviewed the experience gained from the application of Regulation (EC) No 834/2007.
The Council adopted conclusions on the Commission's report i at its Agriculture and Fisheries meeting of 13-14 May 2013 and called on the Member States and on the Commission to develop the organic production sector at an ambitious level by reviewing the current legal framework, with a view to improving its usability while providing for a period of stability and certainty, aiming at further clarification and simplification, and addressing the current outstanding issues requiring further development.
The review of the organic production legislation is part of the Commission's Regulatory Fitness and Performance Programme.
The review provides an opportunity to align the Commission implementing powers in Council Regulation (EC) No 834/2007 to the differentiation between delegated and implementing powers of the Commission introduced by Articles 290 and 291 of the Treaty on the Functioning of the European Union (TFEU).
The first piece of Union legislation on organic production was adopted in 1991. Council Regulation (EEC) No 2092/91 provided a legal definition of organic production through production rules, and set out control and labelling requirements and rules for importing organic products. This provided a basis for protecting consumers and organic producers against false and misleading organic claims.
That legislation was revised with the adoption of Council Regulation (EC) No 834/2007 in June 2007, which in particular:
– defined organic production further by describing its objectives and principles,
– improved the harmonisation of the organic production rules within the Union, by putting an end to national rules for animal products,
– introduced the possibility of exceptions to the rules under the responsibility of Member States (MS) but with strict limitations and for a limited period of time,
– linked the organic control system to the official food and feed controls system provided for in Regulation (EC) No 882/2004 and made the accreditation of private control bodies obligatory,
– restructured the import regime: in addition to the recognition of third countries for the purpose of equivalence, the European Union recognises control bodies (CBs) active in third countries for the purpose of equivalence or compliance. The previous system of individual authorisations granted by MS consignment by consignment was removed from the basic Regulation and is now being phased out.
This initiative pursues the objectives of the Communication on Smart Regulation in the European Union. One of the aims of the review is to simplify legislative burdens.
It is in line with the general framework of the Europe 2020 Strategy, in particular regarding the sustainable growth priority and the promotion of a more resource-efficient, greener and more competitive economy.
It is consistent with the reform of the Common Agricultural Policy (CAP), which shapes the overall framework for the development of agriculture in the Union for the period 2014-2020. The new provisions aim at sustainable competitiveness to achieve an economically viable food production sector, together with sustainable management of the Union's natural land-based resources, in which organic production has been identified as a key-element.
The proposal takes into account the new Common Fisheries Policy as regards aquaculture, which plays a key role in ensuring sustainable, long-term food security as well as growth and employment while reducing pressure on wild fish stocks, in a context of growing global aquatic food demand.
It is also consistent with the Commission's proposal for a new Council and Parliament regulation on official controls, which aims at consolidating the integrated approach in all areas related to the food chain by rationalising and simplifying the overall legislative framework whilst simultaneously pursuing the objective of better regulation. In particular, definitions are aligned and/or clarified as appropriate, and the necessary specific control provisions are proposed to be integrated into the single legislative framework for official controls.
Finally, the organic production scheme forms part of the Union's agricultural product quality schemes together with geographical indications, traditional specialities guaranteed, and products of the EU's outermost regions and mountain areas as underlined in the Communication from the Commission to the European Parliament and to the Council, the European Economic and Social Committee and the Committee of the Regions on agricultural product quality policy and indicated in Regulation (EU) No 1151/2012 of the European Parliament and of the Council on quality schemes.
Contents
- RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS
- LEGAL ELEMENTS OF THE PROPOSAL
- BUDGETARY IMPLICATIONS
- 1.1. Grounds for and objectives of the proposal
- 1.2. General context
- 1.3. Existing provisions in this area
- 1.4. Consistency with other policies
- 2.1. Consultations
- 2.2. Main outcome of the consultations
- 2.3. Impact assessment
- 3.1. Summary of the proposed action
- 3.2. Legal basis
- 3.3. Subsidiarity and proportionality principles
- 3.4. Choice of instruments
- 5. OPTIONAL ELEMENTS: SIMPLIFICATION
- 6. ALIGNMENT
The current situation was analysed in depth on the basis of the information collected during a series of stakeholder hearings to which the Commission invited over 70 experts and academics to discuss fully the current and future challenges facing the organic sector.
The Commission launched an on-line consultation at the beginning of 2013. Around 45 000 replies were submitted in response to the questionnaire and almost 1 400 free contributions were received. The majority (96%) of responses were submitted by citizens of the European Union, while the remaining 4% were sent by stakeholders.
In addition, stakeholders of the sector were informed and consulted on the review in several meetings of the Advisory Group on Organic Farming.
Member States, as competent authorities in charge of implementing the legislation, were kept informed and were consulted on technical aspects of the review.
The respondents to the public consultation are concerned mainly with environmental and quality issues. They would like the European organic rules to be strengthened and wish to have uniformity of organic rules for farmers and other operators throughout the Union. Therefore the majority are in favour of putting an end to the exceptions to the rules. High expectations were expressed as regards residues of products and substances that are not authorised for use in organic production. The organic logo of the European Union was ranked equal to national logos as a means of recognising organic products. The majority of citizens and stakeholders trust the organic control system while considering that it could be improved, mainly by introducing electronic certification. They are also in favour of group certification for small farmers.
The need to improve the legislation on organic production is widely acknowledged in the organic sector. There is also broad agreement that organic production should remain close to its principles and objectives and that exceptions to the rules should be ended.
The impact assessment compared three alternative policy scenarios:
– The improved status quo, based on improvements and better enforcement of the current legislation.
– The market-driven option, which aims at providing the conditions needed to respond dynamically to further market developments with more flexible rules. Long-standing exceptional rules would be integrated in the production rules.
– The principle-driven option aiming at re-focusing organic production on its principles, which would be better reflected in the production rules. Exceptional rules would be ended.
The three policy options have been assessed against their potential to achieve the CAP 2020 objectives, specific policy objectives and operational objectives for the review, and in terms of effectiveness and efficiency. The principle-driven option performs better according to all criteria evaluated, followed by the market-driven option and lastly the improved status quo.
The principle-driven option is expected to produce the following results:
– A positive market outlook, thanks to greater consumer confidence, which is likely to support organic product prices and to attract newcomers,
– The removal of exceptions to the rules should contribute to the development of organic inputs, notably seeds,
– Clearer and simpler production rules will make the sector more attractive,
– Competition will become fairer as a result of stronger harmonisation, simpler and clearer rules and the move from equivalence to compliance for the recognition of control bodies in third countries,
– Consumer confidence will rise with an improved control system and harmonised production rules taking account of evolving societal concerns (environmental management system for processors and traders, animal welfare),
– A risk-based approach is expected to improve the effectiveness and efficiency of controls and contribute, together with a more reliable import regime, to fraud prevention,
– Positive environmental impacts associated with organic production will be stressed by ending exceptional rules,
– Animal welfare conditions will be improved through the removal of exceptions.
The impact assessment concluded that the preferred option was the principle-driven option, together with the inclusion of the improvements proposed in the improved status quo, and with some sub-options.
Particular attention has been paid to simplification during the whole process. The preferred option will:
– clarify the provisions on scope, production rules, labelling and controls,
– remove ineffective provisions,
– limit the MS' scope for granting exceptions to the rules,
– simplify the import regime,
– simplify requirements for small farmers, in particular with the introduction of group certification.
As regards administrative costs, the current proposal will lead to the removal of 37 out of the 135 existing information obligations imposed on organic operators and administrations.
Organic production must continue to adhere to a set of principles that reflect closely the expectations of consumers.
Specific production rules are brought together in an Annex to the proposed Regulation, thus addressing the issue of readability.
Production rules are strengthened and harmonised by removing exceptions, except where temporary measures are necessary in order to allow organic production to continue or recommence in the case of catastrophic circumstances. Organic agricultural holdings have to be entirely managed in compliance with the requirements applicable to organic production and retroactive acknowledgement of the conversion period is in principle not possible any more. The agricultural ingredients used in the composition of organic processed products have to be exclusively organic. With the exceptions of micro-enterprises, organic operators other than farmers or operators producing seaweed or aquaculture animals are required to develop a system for improving their environmental performance.
The control system is improved by integrating all control-related provisions into a single legislative text under the Commission proposal for a Regulation on official controls and other official activities in food and feed. Consequently, operators, competent authorities, control authorities and control bodies will no longer need to rely on two different legislative texts for the provisions related to controls.
Controllability is enhanced by clarification, simplification and harmonisation of the production rules and the removal of a series of possible exceptions to such rules.
The proposal seeks to do away with the possibility to exempt certain types of retailers provided for in Regulation (EC) No 834/2007, which has led to different interpretations and practices across Member States and has made management, supervision and control more difficult.
The risk-based approach to official controls is reinforced by removing the requirement for mandatory annual verification of compliance of all operators provided for in Regulation (EC) No 834/2007. This will make it possible to adapt the control frequency, through delegated acts to be adopted in accordance with Regulation (EU) No XX/XXX (Official Controls Regulation, so that operators with a low risk profile may be physically inspected less than annually and/or subject to reduced annual physical inspections, while higher risk operators would be more closely targeted. There will thus be a fairer balance of the control pressure on operators, with a reduced burden on those with a proven track record of compliance with the rules, and more effective and efficient use of resources by the competent authorities, control authorities and control bodies.
Specific provisions are introduced in order to increase transparency with regard to fees that may be collected for the controls, and the provisions related to publication of operators together with information on their certification status are reinforced.
A system of group certification is introduced for small-scale farmers in the Union with a view to reducing inspection and certification costs and the associated administrative burden, strengthening local networks, contributing to better market outlets, and ensuring a level playing field with operators in third countries.
Specific provisions are introduced for purposes of enhanced traceability and fraud prevention: operators may not be controlled by different control authorities or bodies for the same groups of products across different stages of the organic chain.
Specific provisions are also introduced to harmonise action to be taken when non-authorised products or substances are detected. In this context, there may be instances where farmers are prevented from marketing their products as organic due to the unintentional presence of non-authorised products or substances. Member States may be authorised by the Commission to grant national payments to compensate for the losses incurred in such instances. In addition, Member States may use the instruments of the Common Agricultural Policy to cover totally or partially such losses.
Lastly, the proposal sets out action to be taken throughout the Union on the same broad categories of non-compliance so as to ensure a level playing field in the treatment of operators, a properly functioning internal market and maintenance of consumers' trust, while not prejudging the determination of sanctions that is within Member States' competence.
The trade regime is adapted to improve the level playing for the organic operators of the European Union and in Third Countries and to better ensure consumer confidence. The possibility of equivalence agreements with Third Countries remains while the system of unilateral equivalency is phased out. The recognition of control bodies is proposed to be progressively shifted to a compliance regime.
Treaty on the Functioning of the European Union, the first paragraph of Article 42 and Article 43 i thereof.
The proposal revises an existing quality scheme set within the CAP. Production of and trade in agricultural products and foodstuffs on the market of the European Union and ensuring that the internal market in organic products functions properly, are matters of Union competence shared with MS.
As part of the overall CAP, to ensure smooth development of the single market, a Union-wide organic scheme is more efficient than 28 different schemes. In addition, it allows for a stronger and more consistent trade policy vis-à-vis global trading partners, in particular by enhancing the bargaining power of the Union.
The proposal leads to further harmonisation in the following areas:
– The current scope offered to Member States for granting exceptions to the rules, which leads to unfair competition among operators, risk of loss of consumer confidence, complexity in the legislation and trade issues (difficulties in enforcing compliance), is reduced.
– The fact that the response to the same non-compliance with EU organic legislation can vary between Member States is an issue leading to unfair competition and ineffective functioning of the single market.
The proposed instrument is a regulation, since the existing provisions have been proven to provide an appropriate framework for Member States; no other type of measure would be appropriate. A directive would lay down more flexible rules, which could entail unfair competition among operators and lead to confusion and deception of consumers. A regulation provides a consistent approach for Member States to follow and reduces the administrative burden because operators are required to comply with a single set of rules. Soft law instruments such as guidelines are considered inadequate to tackle differences in the interpretation and implementation of the rules and in view of the international context.
The proposal allocates a budget for technical assistance measures. Details of the budgetary implications can be found in the legislative financial statement.
The proposal provides for simplifications and clarifications and fills several gaps in the legislation. It involves the removal of 37 of the 135 existing obligations in the organic farming legislation. The proposal involves significant reduction of the administrative burden. Delegated acts stemming from the proposal will be drafted according to the same principles.
On production rules, the proposal greatly simplifies things for operators and national administrations with a limitation on the Member States' scope for granting exceptions. Several ineffective provisions are removed, particularly through reinforcement of the risk-based approach to controls. On the import side, the compliance regime for control bodies will be easier to manage for the producers, the control bodies and the Commission.
A significant simplification for small farmers is brought about by group certification, which entails more proportionate inspection and record-keeping requirements.
The proposal intends to make the legislation more user-friendly. In particular, while the general production rules remain in the text of the Regulation, the specific organic production rules are contained in an Annex to the Regulation.
In 2010, the Commission adopted COM (2010)759 concerning the alignment to the Treaty of Lisbon of Council Regulation (EC) No 834/2007. A detailed discussion in trialogues in 2011 and 2012 lead in practice to a standstill on the alignment proposal. The current proposal incorporates the necessary elements of the alignment proposal, including architecture of legal provisions in basic act, delegated acts and implementing acts. . COM (2010) 759 will therefore be withdrawn as obsolete.