EUROPEAN UNION: THE FOUR OPTIONS FOR WINE REFORM ARE READY. PROPOSAL BY COMMISSIONER MARIANN FISCHER BOEL AIMS TOWARDS RE-EQUILIBRATING PRODUCTION AND MORE SUBSIDIZATION

In Brussels the order of the day for reforming the organization of the wine market in Europe is “re-establishing the equilibrium of the sector by reinforcing subsidization in every winemaking state and region in Europe”. To realize this goal, the offices of the European commissioner for Agriculture Mariann Fischer Boel are ready to intervene with options that aim towards reducing production: they range from the revamping of the politics of the eradication of vines to a more restrictive system. A draft accompanied by an impact document has emerged from the agricultural commission and is currently being examined by the other EU commissions.
The document, whose approval to pass on to ministerial discussion is expected by June 21st, will present four options among which a profound reform of the sector is the preferred choice of Brussels. Based on what emerges from the ministerial debate, EU Commission sources retain that the official reform proposal could be ready by the end of 2006 or submitted by early 2007.
The official initiation of negotiations is imminent with the presentation of the options document and the discussions will determine the final decision. It is already evident that Brussels will push for eliminating the structural surpluses of an estimated 15 million hectoliters to have recourse to help with elimination (up to 2.4 million euros), but also using a heavier hand in regards to irregular or illicit vines.
Below are the four options that Ansa reported have now been proposed, but which may still undergo modifications:
STATUS QUO - An option that Brussels has already refused because it claims that it does not confront the problem of the structural imbalances of the wine market and it does not improve coherence with the politic of quality.
FUNDAMENTAL MARKET ORGANIZATION REFORMS - This is the option that Brussels seems to prefer and retains that it can confront in both the short and long-term the problems of the wine sector, concentrating budget resources on measures that are supplied by a stabilizing of the market and with the structural assessment of the sector. In particular it retains important the introduction of national financial contributions and the transfer of funds for rural development giving member states and winemaking regions the possibility to adapt EU measures to local circumstances and needs, resulting in more targeted subsidization.
REFORM ALONG LINES OF COMMUNITY AGRICULTURE POLITICS REVISIONS - This choice would, among other things, result in “the decoupling of direct payments from the type of production”, which, however, winemakers worry may result in the transfer of responsibility for adjusting to changed market situations to the producers. “If the system is consequently implemented alone, a balanced market should be achieved, but only in the medium-long term, and probably only after a major crisis in the sector leading to a massive adjustment process”.
DEREGULATION OF THE WINE MARKET - As in the case of the Status Quo option, deregulation of all policy instruments is not looked upon positively by the EU. The heavy adjustments required and the lack of structural measures could have a negative and severe effect on the sector and the rural economies of regional areas involved.