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"Evolution of the hop sector"

Commission report to the Council

The European Commission has put forward its proposals for a fundamental reform of the common market organisation (CMO) for hops. This is in line with the reform of the Common Agricultural Policy (CAP) decided by the Council in June 2003. For hops, the Commission proposes to de-link the totality or at least a significant part of the current hops subsidies from production and transfer it to the de-coupled single farm payment, the key feature of the new, reformed CAP. According to the proposal, Member States could opt for total or partial de-coupling; for the latter they have the option of maintaining a coupled aid up to a maximum of 25% of the production aid in order to enable them to cater for particular production conditions or specific features of a more regional character. This payment as well as other direct payments will be linked to the respect of environmental and food safety standards through "cross-compliance". The Commission plans to table the legal text for the hops before the end of the year.

The Commission's reform proposal for hops is based on the assessment report on the sector requested by the Council before 31 December 2003. From this analysis it is obvious that the future system must meet three crucial requirements, i.e., maintain the viability of production, ensure economic conditions favourable to production and accommodate the market trend. Concerning the first requirement, the main elements of the existing hops CMO, which are the product certification provisions and the central role of the producer groups, will continue to apply as they proved to be very efficient. Integrating the hop production aid into the single payment system best fulfils the second and third requirements.

As far as the growers are concerned this system is simple, flexible and sustainable, and equally provides for the stability of present returns by means of an aid equivalent to the present aid and a more efficient and direct transfer of the support. Moreover it offers alternatives for producers in the case of short-term and structural market crises as the grower will be able to halt production temporarily or to quit production and use the land for other types of production.

To encourage growers to organise, Member States could decide to make part or all of the coupled aid conditional on membership of a producer group.

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Press release (30/09/2003)

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Agricultural markets: Hops

CAP reform

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