Support for cotton production

Subject: Support for cotton production

For the second year in a row, Greek cotton growers were paid at historically low levels for the raw material they supplied to domestic ginning mills. In the last week of 2020, the price was fixed and did not exceed the 42-cent rule, despite the international price falling to 77 cents a pound. At the same time, most analysts have identified supportive fundamentals in the international cotton market, with a decline in global production in 2020 and a steady recovery in demand. Only three countries now produce cotton in the EU, and Greece dominates the market with 80% of European production.

Given that the EU’s present policy on cotton aims to promote a competitive, sustainable and market- oriented cotton sector, while respecting its commitments to support cotton production in regions where such cultivation is important for the rural economy, can the Commission say:

1. What restructuring programmes were implemented in the last programming period to support cotton producers and investment in the ginning industry and what progress has been made to date?

2. What funding has been allocated to help Greek cotton producers and how much has been used?

3. Can additional funds be made available to the cotton sector to cover the losses caused by the pandemic?

Answer given by Mr Wojciechowski on behalf of the European Commission (10 March 2021)

Under the current Common Agriculture Policy framework, cotton producers of eligible Member States may benefit from a crop- specific payment for cotton per eligible hectare. This is a production-limiting scheme (1). In Greece, the reference amount of this crop-specific payment for cotton has been set at EUR 234.18 per hectare for the base area of 250 000 hectares and the reference yield of 3.2 tons per hectare (2). Consequently, the total amount available to Greece’s cotton producers under this scheme amounts to EUR 187.3 million per year, out of which between 93%-99% is actually disbursed.

In addition, cotton producers might also benefit from other types of income support (3), if they meet the corresponding eligibility conditions. These types of income support are granted irrespective of the actual production (4) or destination of the product.

Under the European Agricultural Fund for Rural Development (EAFRD) (5), through their rural development programmes (RDP) for the period 2014-2020, Member States may support the cotton sector via investments in physical assets (6), skills training and farm advisory services as well as conversion and conservation of organic agriculture. Support may be also provided for new participation by farmers to quality schemes and risk management measures and in particular the income stabilisation tool. The Greek RDP 2014- 2020 currently supports the actions as mentioned above except risk management tools — out of the EUR 965 million budget allocated for those actions in all sectors, Greece declared payments of EUR 395 million (41%) (7).

There are no additional, pandemic-related, funds specific for cotton producers. However, Member States may explore the opportunities provided by the Recovery and Resilience Facility (8).

⋅1∙ (World Trade Organisation Blue box).

⋅2∙ In accordance with Article 58 of Regulation (EU) No 1307/2013.

⋅3∙ In particular the Basic Payment Scheme.

⋅4∙ Type of crop and quantity produced.

⋅5∙ Regulation (EU) 1305/2013.

⋅6∙ Including investments in processing, marketing and/or development of agricultural products.

⋅7∙ Data provided by Greece as at 30 November 2020.

⋅8∙ https://ec.europa.eu/info/business-economy-euro/recovery-coronavirus/recovery-and-resilience-facility_en