Press Release: Commission consults stakeholders on cotton regime

The European Commission has published a consultation concerning the EU cotton regime. Following the reform of the Common Agricultural Policy in 2003, the Council in 2004 adopted a new aid regime for cotton (applicable from January 2006). Under the new arrangement 65% of the aid was "decoupled" (i.e. no longer linked to production) and 35% remained linked to cotton production, in the form of area payments. The reform was contested by the Spanish government, at the European Court of Justice, which annulled the cotton reform in September 2006. The Court did not question the reform's approach (i.e. the change of support system) but found that the Commission had failed to carry out an impact study that included labour costs in the calculation of production costs, and failed to assess the effect of the reform on the local ginning industry. As part of the preparation of the impact assessment, prior to the preparation of a new proposal, the Commission is launching an internet consultation. Responses will be taken into account when the options for the new proposal are considered.