The European Union may have to renegotiate its hard-won reform of the cotton sector after an adviser to the bloc's highest court ruled on Thursday that a key part of its new subsidy system was flawed and arbitrary.
Assessing a case filed by Spain against EU governments over the reform, a European Court of Justice (ECJ) advocate general said there had been no advance study of its socio-economic impact so the revised EU subsidy system could not be justified.
EU farm ministers haggled into the small hours during a marathon meeting in Luxembourg in April 2004 to agree a package of reforms of three so-called Mediterranean products - olive oil, cotton and tobacco. Spain, among others, voted against.
The deal was that from 2006, all three sectors would be altered along the same lines as the EU's farm reform last June by breaking the link between the subsidy a farmer receives and production, a concept known as decoupling. Spain filed its complaint over the final deal to the ECJ claiming that the EU's revamped cotton regime would encourage farmers to abandon cotton growing in favour of competing crops, with negative consequences for cotton-dependent farm regions.
Its complaint was based on four legal arguments. The ECJ advocate general, whose opinion is a recommendation to the court for a future judgement, knocked down three of the arguments but upheld the fourth - that the reform violated the fundamental EU principles of 'proportionality and legitimate expectations'.
Under EU law, the principle of proportionality set out that measures adopted by EU institutions - such as the cotton reform - do not exceed what is "appropriate and necessary" to attain the objective that a particular law or regulation aims to reach.
The recommendation found fault with both the European Commission, which proposed the cotton reform with no advance impact study of the consequences and also a patchy cost analysis, and the Council of EU ministers, which agreed to it.
"By introducing the new support system without carrying out a previous examination of the likely impact of the modification ... the Council has made choices whose arbitrariness violates the principle of proportionality," the advocate general said.
"By not taking fixed labour costs into account in its calculations to determine the level of coupled aid, the Council has committed a manifest error of assessment," it added.
The 2004 deal set down that for cotton, one of the world's most heavily subsidised crops, 65 percent of EU payments would be decoupled and 35 percent converted into area-based payments.
The consequences could be immense, although the ECJ may not follow the advocate general's opinion when it makes its final judgement on the Spanish case. But the court usually follows the advice of its advocates general in a majority of cases.
"This is only the opinion of the Advocate-General and not a Court judgement," said Michael Mann, the Commission's spokesman on agriculture.
Comments
Comments are closed.