The EU Commission on Friday proposed keeping the bloc's cotton growers' subsidy scheme, largely de-linking aid from production, that Europe's highest court contested last year after a Spanish complaint.
Under the system, most EU aid, 65 percent, will remain "decoupled," no longer linked to cotton production. In order to receive that money, cotton farmers would simply have to respect strict standards of environmental protection, animal welfare and food safety. "This proposal maintains the current split between decoupled and coupled payments, which was working well in the cotton sector," said EU Agriculture Commissioner Mariann Fischer Boel in a statement.
"This mix is consistent with the aims of the CAP (Common Agricultural Policy) reforms, giving producers more stable incomes, allowing them to react to future market developments and ensuring environmental protection," she added. The EU's executive arm was able to re-propose the measures after carrying out a proper impact assessment that, according to the European Court ofJustice in September 2006, the initial proposals lacked. The 35 percent "coupled" element in the EU cotton aid "has been kept to avoid abandonment of prodmon Agricultural Policy.
The move was also in response to EU partners' concerns within the World Trade Organisation, particularly amongst developing nations for whom the pre-existing subsidies distorted the world market.