Mr. Paul Dillon:

By way of background, the first EU legislation on organic farming was adopted in 1991. Council Regulation No. 2092/91 provided a legal definition of organic farming through production rules, defined control and labelling requirements and introduced a regime for importing organic products. This legislation was substantially revised with the adoption of Council Regulation No. 834 in June 2007, and the Commission implementing regulation, No. 889/2008, which defined the detailed technical rules of organic production. The regulation linked the organic control system to the official food and feed controls provided in Regulation No. 882/2004 and made obligatory the accreditation of private certifying bodies. Organic aquaculture was added to the list of organic products in 2010.
When adopting Council Regulation No. 834/2007, the EU Council identified a series of issues, regarding in particular the scope of the legislation, the prohibition of the use of GMOs and the functioning of the internal market and control system. The Commission was required to submit a report on these issues to the European Parliament and the Council after having reviewed the experience gained from the application of Regulation No. 834/2007. This report was submitted to the Council and Parliament in 2012.
The Council, under the Irish Presidency in 2013, adopted conclusions on the report at its meeting on agriculture and fisheries on 13 and 14May 2013on the basis of the Commission's report. These included a call to develop the organic farming sector at an ambitious level by reviewing the current legal framework, with a view to improving its usability while providing for a period of stability and certainty, and aiming at further clarification and simplification and addressing the current outstanding issues requiring further development.
In 2013, the EU Commission initiated an impact assessment of the organic sector that included a wide-ranging consultation process. The Commission concluded in the impact assessment that the current regulations are not sufficiently fit for purpose to allow the sector to develop. It chose to overhaul radically the current regulations with the objective of removing obstacles to the sustainable development of the sector, further strengthening the Single Market by guaranteeing fair competition for producers, protecting the integrity of organic products and improving consumer confidence in the production system.
Three possible legislative policy options were identified. First, the improved status quo option notably includes clarifications in the scope of the legislation and simplifications in the labelling rules and addresses some gaps in the legislation. Second, the market-driven option aims at providing the conditions to respond dynamically to further market developments thanks to a more product-oriented scheme with flexible production rules. Third, the principle-driven option aims at re-focusing organic farming on its principles. Production rules are to be strengthened, the control system is to be fully risk based, and import rules are to be overhauled. The preferred option is the principle-driven model, which entailed a complete overhaul of the existing regulation and culminated in the regulatory proposal currently under discussion and the subject of our meeting here today.The proposal must also be aligned to the Lisbon treaty, which requires the agreement of the co-legislators – the Council and EU Parliament – to the allocation of delegated powers to the Commission.
The EU Commission introduced the proposal to the Council in early 2014 under the Greek and Italian presidencies. The proposal completed its first reading on 15 October. The EU Parliament, as co-legislator, will begin discussions on the proposal in January.
The discussions are difficult, with many contentious issues arising, and progress is slow. While there are many elements in this proposal that are welcomed, every member state, without exception, has issues of concern. Some key issues have emerged about which we share concerns. These include a series of issues of a political and technical nature. Among them are a Lisbon treaty alignment exercise, involving the transfer of decision-making powers to the Commission via the delegated Acts; the scope of the proposal, which involves determining what organic products are included in the regulation and, just as important, what is left out; the transfer of organic controls to the new official controls regulation, currently under discussion by the EU Council; and the introduction of a risk-based control regime and the removal of the requirement of an annual inspection by the control bodies.

Other factors include harmonisation of residue sampling, analysis and action and establishing a minimum threshold for pesticide residues above which the product cannot be sold as organic and introducing the possibility for member states to pay compensation.
In terms of mixed holdings, we are concerned at the removal of the current flexibility whereby a farm can produce organic and non-organic produce in the same holding. We are also concerned about the proposedsevere restriction in the reduction of the conversion period as well as the proposals to include within the control regime all retailers who sell organic products and to exclude the possibility to label in-conversion products as organic. The proposals to remove or severely restrict flexibility to allow member states to provide, under very exceptional circumstance, for the introduction of non-organic breeding stock, seeds and propagation material onto organic farms are of concern. Difficulties also arise with regard to the proposed expansion of the import regime to organic imports fully in compliance with the EU organic standards.
The Commission is holding firm but the Italian Presidency is preparing a compromise text.I welcome any questions committee members may have for us.