The EU banana regime is assessed
20 May 2004
The EU Court of Auditors issued a report on 'the sound financial
management of the Common Market organisation for bananas' in October
2002. The report examines:
-
the way in which the Commission devised and implemented the
measures introduced to achieve the CMO's objectives; -
the way in which these measures have been managed by member
states; - the extent to which the objectives had been achieved.
The Court found that the Commission had been successful in:
- harmonising the EU banana regime;
- ensuring free movement of bananas in the EU;
- maintaining consumer choice.
However the report expressed concern about overpayment of aid under
the income compensation scheme in the banana sector (total expenditure
€1.2
billion since 1991). It furthermore found that virtually no premiums
had been taken up to take land out of banana cultivation. Perhaps
more significantly it identified weaknesses in the system of licensing
and verification of imports which had resulted in a major fraud
and the loss of some €160
million in uncollected duties. The Court did however note that the
Commission was taking steps to address this problem.
It further noted how the Commission was scheduled to carry out
a major evaluation of the banana regime in 2004, and it urged the
Commission to use this opportunity to carry out an objective assessment
and fundamental review of current measures, and the future of banana
production in the EU.
Editorial comment
In resolving the trans-Atlantic banana dispute the management of
the licensing system was the key point of contention. Given the
significance of the licensing issue to the whole banana dispute,
the discovery of wide-scale fraud places past debates in a somewhat
different light.