The changing face of the European leaf The decline of subsidies WTNA 2015 Conference - Richmond, VA,...

The changing face of the European leaf

The decline of subsidies

WTNA 2015 Conference - Richmond, VA, May 12, 2015

Carlo Sacchetto - FETRATAB

Established in 1994, Fetratab represents the European National Associations of tobacco processing and trading Companies or single Companies where NA does not operate. Fetratab, through CELCAA – European agrifood traders Confederation, is fully recognized by all European Institutions.Fetratab represents more than 70% of the overall EU raw tobacco processing and trading.

Member Associations/Companies

Bulgaria: Alliance One Bulgaria Eood, Trakia Tabac Eood and Socotab Bulgaria EoodCroatia: Hravtski Duhani d.d.France: UCAPT (Union des Coopératives Agricoles des Planteurs de Tabac)Germany: Alliance One Rotag AGGreece: HATPI (Hellenic Association of Tobacco Processing Industries)Hungary: Universal Leaf Tobacco Magyarország Zrt.Italy: APTI (Associazione Professionale Trasformatori Tabacchi Italiani) Poland: Universal Leaf Tobacco Poland SpZoo Spain: ANETAB (Asociación Nacional de Empresas Transformadoras de Tabaco)

President Mr. Wojciech LikSecretary General Mr. Carlo Sacchetto

2

FETRATAB, a presentation 1/2

Fetratab always worked in very strong cooperation with Unitab, the European tobacco growers Federation and, at world level, is also a supporting member and cooperates with ITGA.

Since year 2006 the two EU raw tobacco Federations were joined by Effat, the European Federation of the agriculture and tobacco workers trade unions, to set up a permanent body to coordinate the political activities in favour of the sector at EU level.

In the last ten years this peculiar tripartite tobacco table produced many joint documents, had several meetings with Commissioners, EU officials and EP delegations, and organized tobacco congresses and rallies.

3

FETRATAB, a presentation 1/2

Short history of the EU tobacco subsidies

• 1970: the decision to dismantle the State monopolies (buying all tobacco produced) originated a tobacco Common Market Organization (CMO) to defend the production, based on a deficiency payment system, related to the gap with the average world production costs:– Unlimited budget (no quotas)– Fixing of a target price– Subsidies paid to the processors based on delivered volumes – Intervention price (for the unsold tobacco)– Restitutions to export

• 1992: Common Agricultural Policy (CAP) reform– Fixing of European and national production quotas– Subsidies paid directly to the growers under a cultivation contract– No more intervention for the unsold tobacco– No more restitution to export 4


• 1998: CAP reform– Fixing of growers’ individual quotas– Part of the subsidies paid (30-45%) based on quality (price as the proxy)– Incentives to abandon the sector (safety net for marginalized farmers)– Introduction of auctions (never implemented)

• 2001*: the Goteborg summit Commission [hypocrite] sentence: “due to the need of coherence between the EU Agriculture and Health

policies, tobacco subsidies must be phased out within a short term”

[* the outset of the WHO FCTC was made in Geneva in May 2000]

5


• 2002: the tobacco CMO reform left the rules almost unchanged until crop 2004, the entire amount of the EU coupled subsidies was around 970 M€/year since that crop, over a production of less than 334,000 tons (avg. 2.90 €/Kg)

• 2004: CAP reform, inspired by the decoupling of all the subsidies (WTO green box compliant)– The growers’ individual subsidies (base crops 2000-2002) to be decoupled and paid on a

per Ha base not linked to the kind/volumes of production; options for the transitional period crops 2006-2009 were:• 100% decoupled immediately: GR, BE, AT (production dropped immediately 80-100%)• 40% decoupled from crop 2006 to 2009: Italy, Spain, France, Germany, Portugal (50%)

– From crop 2010 on the historical reference amounts will be divided in 2 halves:• 50% diverted to the Rural Development Programs• 50% paid decoupled to the farmers (not necessarily tobacco growers) on a per Ha base

6


• 2009: CAP health check, nothing changed despite the European Parliament vote in favor of the prosecution of tobacco coupled subsidies, just a small amount (0,20-0,40 €) can be paid to the grower only for quality tobaccos (IT, SP, FR, PL) or for tobacco farm restructuring (HU) until crop 2014

• 2014-2020: CAP reform, once again, despite the European Parliament contrary vote, from crop 2015 the CAP does not allow any kind of coupled subsidies to tobacco growing, due to:– a discrimination against the tobacco growers towards the other farmers,

just on a hypocrite base– the fact that tobacco producing countries are a small minority in the EU

7


From 2015 coupled subsidies may be granted to the following sectors:

• cereals and rice• beef and veal, sheepmeat and goatmeat, milk and milk products • fruit and vegetables, nuts and starch potato • olive oil and oilseeds• sugar beet• seeds and grain legumes • dried fodder• flax and hemp• silkworms• hops• cane and chicory• short rotation coppice 8

“Name it and we got it!but, for God’s sake,don’t say tobacco!”

The EU producing Member StatesBy year of adhesion to the EU

1958: Italy, France, Germany, Belgium

1981: Greece

1986: Spain, [Portugal *]

1995: [Austria *]

2004: Poland, Hungary, [Cyprus *]

2007: Bulgaria, Romania, [Slovakia *]

2013: Croatia* = not producing tobacco anymore

9

The EU producing Member States - 2014

10

The EU producing Member States Crop 2014 total deliveries (211,000 t)

11

Italy5392426%

Greece3320016%

Spain3228515%

Poland3000014%

Bulgaria2903014%

Hungary96895%

France92004%

Croatia91364%

Germany47202%

Belgium1100%

ItalyGreeceSpainPolandBulgariaHungaryFranceCroatiaGermanyBelgium

The EU producing Member States Crop 2014 deliveries by variety group (211,000 t)

12

FCV122281

58%LAC

4013919%

DAC41902%

FC21541%

Basma2700013%

Katerini11400

5%

Kaba K41302%

FCVLACDACFCBasmaKateriniKaba K

The EU producing Member States Crop 2014 deliveries by variety group (211,000 t)

13

Italy

Greece

Spain

Poland

Bulgaria

Hungary

France

Croatia

German

y

Belgium

-

10,000

20,000

30,000

40,000

50,000

60,000

Kaba KKateriniBasmaFCDACLACFCV

tons

The case of ItalyCrops 1999 - 2014

14

19992000

20012002

20032004

20052006

20072008

20092010

20112012

20132014

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Growers (#)

FCVLACDACFCSCKAT

19992000

20012002

20032004

20052006

20072008

20092010

20112012

20132014

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

Deliveries (MKg)

FCVLACDACFCSCKAT

19992000

20012002

20032004

20052006

20072008

20092010

20112012

20132014

-

1

2

3

4

5

6

AVG price (€/Kg)

FCVLACDACFCSCKAT

19992000

20012002

20032004

20052006

20072008

20092010

20112012

20132014

-

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

MKT value (M€)

FCVLACDACFCSCKAT

The decline of subsidiesItaly: crops 2005, 2009 and 2014

15

2005 2009 20140

0.5

1

1.5

2

2.5

3

Subsidies (€Kg)

FCVLACDAC

2005 2009 20140

0.5

1

1.5

2

2.5

3

Commercial price (€/Kg)

FCVLACDAC

2005 2009 20140

0.5

1

1.5

2

2.5

3

3.5

4

Price+subsidies (€/Kg)

FCVLACDAC

FCV LAC DAC0%

200%

400%

600%

800%

1000%

1200%

1400%

1600%

1800%

292%

501%

1629%

98% 118%193%

16% 21% 30%

Subsidies/price ratio (%)

200520092014

The decline of subsidiesItaly: crops 2005, 2009 and 2014

16

2005 2009 20140%

10%20%30%40%50%60%70%80%90%

100%

2.81

1.68

0.42

0.96

1.73

2.70

FCV

Subsidies (€/Kg) Price (€/Kg)

2005 2009 20140%

10%20%30%40%50%60%70%80%90%

100%

2.38

1.43

0.42

0.48

1.21

2.05

LAC


2005 2009 20140%

10%20%30%40%50%60%70%80%90%

100%

2.38

1.43

0.42

0.15

0.74

1.38

DAC


The dawn of a new eraItaly crops 2005 – 2014

1. Overall quantity declined -53%, mkt value increased by +70%, complete elimination of unwanted tobacco (Sun Cured, some DAC), thousands of marginal farmers -83%, too small scaled or producing not required tobaccos and concentration of production in larger scale farms with a +170% rise of the average per farm deliveries;

2. Deep supply chain restructuring: creation of few strong Producers organizations, Interbranch organization, elimination of middlemen;

3. Reduction of the processing plants from more than 20 to 4;4. Production costs efficiency dramatically improved (biomasses, etc.);5. Huge overall quality improvement, no stocks, avg. price paid +266

%;6. Strong support from the Public Authorities, in particular the

Ministry of Agriculture signing multiannual purchase agreements with international and local manufacturing Companies

17

The value of the decoupled payments

• It is quite impossible to determine which is the, even average, amount of the decoupled payments received by each farmer in the old (2014) as also in the new CAP (2015-2020).

• This is mainly due to the fact that the model and the amount of the decoupled payments is inclusive of all the subsidies received in the reference years which also vary from produce to produce and years to years (the tobacco part is referred to 2000-2002 crops for old MS).

• Also the basis of calculation may vary in the different MS and also in case they are old (EU-12) or new MS (adhered after 2004).

• What is certain is that that, starting from 2015, the DP amount will increase in the new MS and decrease in the old ones, due to the external convergence. The same trend will apply at individual level in the single MS (internal convergence), flattening the differences between who has an higher value of per hectare decoupled entitlements and who has it lower.

18

Other EU subsidies

• Apart from the per hectare decoupled Single/Basic Payments and the Coupled/Specific Subsidies, considered in the following slides, also other sources of financial support for the tobacco farmers can be found in the RD, like the Agro-Climatic-Environmental measure already applied in Italy and Spain in the old CAP, which provided around 1,000 €/Ha in Italy and around 850 €/Ha (FCV) or 750 €/Ha (LAC) in Spain during the old CAP. RD provides from 2015 also other possible indirect subsidies for the tobacco growers/rural districts.

• Another applicable measure goes under the name of de minimis State Aids, payable to the farmers on farm basis (independently from the area), up to 15,000 € in 3 years, without need to notify to the EU COM. It is financed by the National budget. HU will probably apply this measure.

• Other subsidies are foreseen for investments, research and development or to improve producers cooperation (aids for setting up PO, APO, etc.).

19

20

The approach to a market oriented agriculture, through Producers Organizations (PO) and Inter-branch Organizations (IO), is extended to all agricultural products and becomes a key element.

• A support to the POs is foreseen for the first 2 years from the setting up of the activities and it is defined in the Rural Development Regulation

• Associations of PO (APO) have the same functions of Producers Organizations

• Inter-branch Organizations are recognized by Member States and can set erga omnes applicable marketing rules if they represent more than 2/3 of the production

Producers Organizations (PO, APO) and Interbranch Organizations (IO)

Future of coupled payments in the different MS 1/8

Italy

• 2014: art. 68 specific (coupled) support:– National envelope: 24,5 M€ (22.5 M€ for all tobacco varieties; 2 M€ for KY

leaves for cigar wrappers) – per Kg payment: around 0.40-0.44 € (FCV, LAC, DAC)

• 2015 onwards: only Decoupled Basic Payments, CAP implementation with “Irish approach” (max. decrease in the period = 30%) – plus the amount paid coupled to each single farmer in 2014 will be decoupled

and paid to the same farmers as a top up of the (decoupled) Basic Payment on a per Ha basis:• FCV = around 1,200 €/Ha (considering a yield of 3 tons/Ha) in 2015 then decreasing• LAC = up to 2,000 €/Ha (considering a yield of 5 tons/Ha) in 2005 then decreasing

– possible implementation of de minimis State aids (National budget) of max. 5.000 €/farm/year 21


Spain

• 2014: art. 68 specific (coupled) support:– National envelope: 5,8M€ for all tobacco varieties (FCV, LAC)– per Kg payment: around 0.18 €

• 2015 onwards: only Decoupled Basic Payments, CAP implementation with “Irish approach” (max. decrease in the period = 30%) – the amount paid coupled to each single farmer in 2014 will be decoupled and

paid to the same farmers as a top up of the (decoupled) Basic Payment on a per Ha basis: FCV = around 540 €/Ha (considering a yield of 3 tons/Ha) in 2015 then decreasing.

22


France

• 2014: art. 68 specific (coupled) support: – National envelope: 7,5-8,0 M€ for all tobacco varieties– per Kg payment: around 0.75 €

• 2015 onwards: only Decoupled Basic Payments, CAP implementation with “Irish approach” (max. decrease in the period = 30%) – the amount paid coupled to each single farmer in 2014 will be decoupled and

paid to the same farmers as a top up of the (decoupled) Basic Payment on a per Ha basis: FCV = around 2,200 €/Ha (considering a yield of 3 tons/Ha) in 2015 then decreasing

23


Poland

• 2014 art. 68 specific (coupled) support:– National envelope: 29,035 M€ – per Kg payment: 1.6 €/kg for FCV; 1.50 €/Kg for LAC

• 2015 onwards: CAP implementation keeping SAPS system + CNDP– No more art. 68 specific (coupled) support nor converted to a decoupled top-

up to SAPS– Transitional Complimentary National Direct Payments (decoupled) based on

National Budget

• Expected global budget for tobacco: around 10-15 M€;• Expected per Kg payments: 0.30-0.80 €/Kg in average (1/3 – 1/2 than today level)

24


Hungary• 2014: art. 68 specific (coupled) support: to farm restructuring (paid on per

hectare basis with a minimum of 1.000 work hours and 1.000 commercial revenues)– National envelope: 24,2 M€ – per Hectare payment: FCV 4,350 €/Ha; LAC 3,900 €/Ha (global cropped surface

paid 5,850 Ha)

• 2015 onwards: CAP National implementation keeping SAPS system + CNDP– Expected global budget for tobacco (excluding SAPS): around 19,5 M€

• 12,3 M€ (decoupled) from Transitional Complimentary National Direct Payments (National budget, decoupled), decreasing by 5% each year

• 5,9 M€ de minimis State aids (National budget, coupled, max. 5,000 €/farm/year):• Expected payments to be received by the farmers: around 50% than today,

considering stable the overall production25


Bulgaria• Adhered to the EU July 1st, 2007 and had a special 3 year “sunset clause” to

continue to support tobacco farming through a National Tobacco Fund financed by withdrawals on taxes, then was authorized to pay subsidies to the tobacco farmers (reference period 2008-10) so now the “tobacco” subsidies are paid in a large amount to farmers that gave up tobacco production: Bulgarian Government asked to change reference period but European Commission denied

• In 2014 the amount of the subsidies was around 50 M€

• 2015 onwards: CAP implementation keeping SAPS system + CNDP– Transitional Complimentary National Payments (National Budget): Expected global

budget for tobacco: around 50 M€

26


Croatia

• Adhered to the EU from July 1st, 2013

• 2014: farmers are receiving a National budget based support for tobacco

• 2015 onwards: CAP implementation based on Basic Payment System but, applied at regional level + CNDP– Complimentary National Transitional Payments based on National Budget:

Expected global budget for tobacco: unknown

27


Greece – Germany

• Not receiving any kind of coupled subsidies since crop 2009, nothing expected in future

Belgium

• Not receiving any kind of coupled subsidies since crop 2005, nothing expected in future

28

The future of EU tobacco

- EU tobacco is of a good quality and entirely sustainable from any point of view:- Environmental- Social- Phytopathology/integrity

- EU Tobacco still face a strong political support, international and local manufacturers are signing multiannual purchase agreements with the Ministries of Agriculture (IT, SP) since year 2005

- Overall production is foreseen stable with a slight decline, some varieties (LAC) will possibly face a greater one due to the world production and stocks, while others (Classic Orientals, Verona FCV, France LAC) are still considered strategic

- There will much probably be a further reduction of the number and a concentration of the active processing plants (FR, SP, PL, IT)

- The pursue of rationalization and costs efficiency will continue on indefinitely 29

The EU tobacco productionCrops 2014, 2015E, 2018-2020P FCV (t)

302006 2010 2014 2015E 2018-2020P

-

10,000

20,000

30,000

40,000

50,000

60,000 Italy

Spain

Poland

Bulgaria

Croatia

Greece

Hungary

France

Germany

Others

The EU tobacco productionCrops 2014, 2015E, 2018-2020P LAC (t)

312006 2010 2014 2015E 2018-2020P

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000 Italy

Poland

Bulgaria

Spain

France

Hungary

Croatia

Greece

Others

Germany

Thank you for your attention

Carlo Sacchetto – FETRATAB – [email protected]

WTNA 2015 Conference - Richmond, VA, May 12, 2015

AnnexThe 2014 – 2015 CAP

And they still call it “Common”

33

The 2014 (2015) – 2020 CAP in general

• In force from crop 2014 to 2020 (new Direct Payments 2015-2020); a mid-term review is foreseen in 2017

• CAP in the EU-28 is globally worth 408 Billion € (313 Direct Payments and market measures; 96 Rural Development; before transfers and adapting)

• Keywords: external convergence, internal convergence, basic payment scheme (BPS), greening, MS multiple choices, great complexity

• 5 European Parliament (EP) and Council regulations passed on Dec. 17, 2013, plus a multitude of European Commission (COM) Delegated and Execution regulations, items:

1. Direct Payments (DP)2. Rural Development (RD)3. Single Common Market Organization (CMO)4. Horizontal and Financing Measures5. Transitional Measures for crop/financial year 2014 (mostly regarding DP)

34

A complete U-turn 1/2

… towards complexity and a sort of re-nationalization, much more composite than the previous CAP, which now foresees:

• 7 different measures (6 decoupled) for Direct Payments in spite of 2 (1 decoupled) of the previous CAP

• multiple National choices for the Member States (MS)• an external convergence scheme: the per/hectare national

budgets will gradually converge (even if not achieve by 2020) towards an EU mean value;

• financial transfers from DP to RD: up to 15% for all MS or vice-versa: up to 25% only for new MS (PL, HU, BG, RO and HR);

35

A complete U-turn 2/2

• allows new MS (adhesion from May 1, 2004: PL, HU, BG, HR) to maintain current decoupled Simplified Area Payment Scheme (SAPS) + Transitional Complimentary National Direct Payments (CNDP), based on National budget, or to switch to the new scheme (in any year of the period)

• compels old MS (IT, ES, FR, GR, DE, BE) to adopt the new scheme with 3 different options of internal convergence:1. flat BPS + greening payments by 2015 or later (DE from 2017)2. flat BPS + greening payments by 2019, gradually (none)3. the “Irish approach”: payments based on individual historical decoupled

Single Farm Payments (SFP), with a gradual tendency to flat BPS + greening by 2019 but with a maximum subsidies reduction of 30% 2019 vs 2015 (all other old MS) 36

The new Direct Payments scheme

… is based on 7 different measures (per hectare, excluding partly 5 and 6), payments are made only to active farmers with minimum requirements, degressivity applies, and each MS should choose from the following menu:

1. Greening: compulsory 30% of DP National Envelope (DPNE), requires specific agro-environmental commitments

2. Young farmers: compulsory, up to 2% of DPNE3. Areas with natural constrains: voluntary, up to 5% of DPNE4. Redistributive for first hectares (based on national average farm size):

voluntary, up to 30% of DPNE5. Coupled payments: voluntary, up to 13+2% of DPNE (tobacco excluded)6. Simplified payment scheme for small farmers (average 1.250 €/year),up to

10% of DPNE7. Basic payment: compulsory, the residue after he above choices, theoretically

from 8% to 70% of DPNE 37

38

National ceilings (current prices in mln €)* Country 2013 2014 2015 2016 2017 2018 2019 TOTAL

Belgium (Flanders) 263 251 235 225 222 213 210 1.618Belgium (Wallonia) 306 293 289 285 280 276 272 2.002Bulgaria 580 642 721 792 793 795 796 5.120Czech Republic 903 875 874 874 873 873 873 6.145Denmark 964 926 917 907 898 889 880 6.381Germany 5.330 5.178 4.913 4.880 4.848 4.820 4.793 34.762Estonia 101 110 112 114 124 134 144 838Ireland 1.256 1.217 1.215 1.213 1.212 1.211 1.211 8.535Greece 2.345 2.047 2.079 2.055 2.031 2.009 1.987 14.551Spain 5.055 4.834 4.843 4.852 4.867 4.880 4.893 34.223France 7.853 7.359 7.304 7.273 7.241 7.217 7.192 51.439Croatia - 164 180 199 236 274 311 1.364Italy 4.128 3.953 3.902 3.851 3.800 3.752 3.704 27.090Cyprus 54 51 51 50 50 49 49 353Latvia 146 156 181 206 230 255 280 1.455Lithuania 380 393 418 443 467 492 517 3.110Luxembourg 35 34 34 34 33 33 33 236Hungary 1.313 1.273 1.346 1.344 1.343 1.343 1.343 9.305Malta 6 5 5 5 5 5 5 35Netherlands 831 793 761 749 737 725 714 5.310Austria 716 694 693 692 692 692 692 4.870Poland 3.043 3.362 3.379 3.395 3.412 3.431 3.451 23.473Portugal 567 558 566 574 582 591 599 4.036Romania 1.264 1.429 1.630 1.814 1.842 1.873 1.903 11.755Slovenia 144 139 138 137 136 135 134 964Slovakia 386 435 438 441 445 448 452 3.045Finland 539 523 523 523 523 524 525 3.681Sweden 709 696 697 697 698 699 700 4.895UK (England) 2.392 2.046 2.050 2.054 2.059 1.994 2.000 14.596UK (Wales) 327 270 271 271 272 273 274 1.958UK (Scotland) 596 525 526 527 528 530 531 3.763UK (Northern Ireland) 335 325 326 327 327 328 329 2.298TOTAL EU-28 42.865 41.557 41.616 41.804 41.805 41.763 41.796 293.207

* The amounts are:• Before degressivity/capping;• After flexibility between the pillars of the CAP;• Before application of the financial discipline mechanism;• Before the definitive wine transfer decided by Member States;• Before Croatia’s demining reserve. The amounts do not include cotton payments

and direct payments under the POSEI scheme.

39

EU support for rural development (current prices in mln €)*Country 2013 2014 2015 2016 2017 2018 2019 TOTAL

Belgium (Flanders) 41 41 53 59 59 65 65 383Belgium (Wallonia) 38 38 38 38 38 38 38 264Bulgaria 335 335 335 334 334 333 333 2.339Czech Republic 314 313 312 310 309 307 306 2.170Denmark 90 90 90 90 90 90 90 629Germany 1.179 1.177 1.407 1.404 1.401 1.398 1.395 9.361Estonia 104 104 114 124 126 127 129 827Ireland 313 313 313 313 313 313 312 2.190Greece 601 601 560 560 559 559 558 3.998Spain 1.187 1.186 1.185 1.184 1.183 1.182 1.182 8.291France 1.405 1.636 1.661 1.664 1.666 1.669 1.673 11.374Croatia 332 282 282 282 282 282 282 2.026Italy 1.480 1.483 1.487 1.490 1.493 1.497 1.500 10.430Cyprus 19 19 19 19 19 19 19 132Latvia 138 151 153 155 157 159 161 1.075Lithuania 230 230 230 230 230 230 230 1.613Luxembourg 14 14 14 14 14 14 15 101Hungary 496 495 420 420 419 418 418 3.086Malta 14 14 14 14 14 14 14 99Netherlands 87 87 106 106 106 105 105 703Austria 558 559 561 562 564 566 567 3.938Poland 1.570 1.176 1.174 1.172 1.171 1.169 1.167 8.598Portugal 577 578 579 580 581 582 582 4.058Romania 1.150 1.148 1.147 1.145 1.144 1.142 1.140 8.016Slovenia 119 119 119 120 120 120 121 838Slovakia 271 213 213 213 212 212 212 1.545Finland 335 337 338 340 342 343 345 2.380Sweden 249 249 249 249 250 250 250 1.745UK (England) 218 497 498 497 498 568 569 3.344UK (Wales) 51 98 99 99 99 98 98 643UK (Scotland) 70 124 123 123 123 124 124 810UK (Northern Ireland) 33 33 33 32 32 32 32 227TOTAL EU-28 13.619 13.741 13.927 13.943 13.947 14.026 14.030 97.233

The amounts are:• After flexibility between the pillars of the CAP;• Before transfers from Pillar 1, i.e. voluntary adjustment, amounts under art. 136 and 136b of Reg. 73/2009 and the envelope for cotton

restructuring programme of Spain.

Tobacco producing MS main choices

• Italy, Spain and France – Irish approach, with a maximum reduction of DP subsidies of 30% 2019 vs 2015;– BPS + greening, based upon individual historical decoupled SFP;– BPS topped up on the base of 2014 individual specific (coupled) art. 68 payment amounts but decoupled (aka per

Ha), from 2015 onwards;– Historic BPS basic level reduced by MS decision on coupled support (no tobacco) and few other measures

(redistributive payments for the first hectares in FR, young farmers, etc.).

• Greece and Belgium– Same as above but without BPS top-up (specific art. 68 payment not applied in 2014).

• Croatia – Same as above but on a regional base and without BPS top-up, but with Transitional Complimentary Direct

Payments (National budget).

• Germany – flat rate for BPS + greening on a National base (now same but Regional) from 2017 in 3 steps.

• Poland, Hungary, Bulgaria, Romania– continue on with decoupled SAPS + CNDP, value of BPS will increase due to external convergence, tobacco CNDP

depends on National budget and choices; – tobacco SPS and CNDP does not go to current tobacco growers but to historical tobacco growers (reference period

vary from MS to MS, in any case is not actualized). 40

The changing face of the European leaf The decline of subsidies WTNA 2015 Conference - Richmond, VA,...

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