Crisis in European vine nurseries

WRITTEN QUESTION by Sergio Berlato (UEN) to the Commission

The European Union is world leader in the market for vine nursery products, with an annual output of 360 million cuttings. The steady decline in prices for cuttings on the world market and stronger competition from other producer countries has resulted over recent years in an exponential increase in the number of nursery closures in Europe and has plunged the entire sector into crisis.

In Italy, for instance, it is estimated that in the current marketing year the market for cuttings will shrink by 30 %, and up to 60 % in areas experiencing severe difficulties, such as Friuli-Venezia Giulia, Marche, Salento, Puglia, the Valle del Calore and Campania.

In France, over the past three years alone, fully 130 of the country's 830 vine nurseries have closed down owing to the collapse in market prices for cuttings, which have fallen well below production costs.

Given that the European vine nursery sector is of key importance in economic, social and employment terms in some particularly disadvantaged areas that are lagging behind in development terms, would the Commission not agree that measures providing for:

1. aid of not less than EUR 15 000 per hectare for grubbing up at least 3 000 hectares of root-stock,

2. aid for high-quality nursery initiatives (graft nurseries),

3. special soft loans for the vine nursery sector,

4. aid for cessation of nursery activities,

should be introduced with a view to restoring balance on a market on which there is currently a glut of root-stock and cuttings at below-production-cost prices and to safeguarding the investments made by all wine-sector operators.

Would the Commission also state whether the granting by some Member States, such as Romania, of specific support for the production of cuttings is in keeping with EU competition law and whether it would not be appropriate to adopt measures to put an end to all types of national assistance for the production of cuttings?

Answer given by Mrs Fischer Boel on behalf of the Commission

The Honourable Member asks questions related to the situation of vine nursery products, with regard to the difficult market situation of these products.

Vine propagation materials do not fall within the scope of the common market organisation (CMO) for wine. Thus, the measures foreseen in the wine CMO intended to alleviate the market situation (grubbing-up premium, restructuring and conversion, etc.) are not available for vine nurseries. However, the reform of the wine CMO which entered into force in 2008, is expected to have a positive effect on the wine sector and therefore in the longer term, on vine nurseries.

Support from rural development funds may constitute a source of assistance in adjusting the production of a given area to activities which correspond best to the local possibilities, e.g. measures to support on farm investments aimed at the modernisation of the agricultural holding, diversify the rural economy, or allow early retirement for farmers who desire to cede their nursery activity.

As for state aids given to alleviate the situation, they may only be granted in conformity with the general rules on state aid.