www.checkbiotech.org ; www.raupp.info ; www.czu.cz

The European Commission has today authorised Denmark to pay compensation in
cases where farmers with conventional or organic production suffer economic
losses when genetically modified (GM) material is found in their crops,
November 2005.

This is the first case where the Commission has authorised such state aid.
The compensation will be granted only if the presence of GM material exceeds
0.9 % and is limited to the price difference between the market price of a
crop that has to be labelled as containing GM material and a crop for which
no such labelling is required.

The compensation is entirely financed by obligatory contributions from
farmers who cultivate genetically modified organisms (GMOs).

The admixture of conventional crops with GM material may cause economic
losses to the farmer with conventional crops if his products have to be
labelled as containing GM material and he gets a lower price for them. This
is in particular the case with products from organic farming. At this point
no insurance products against this risk exist in the European Union.

The Danish compensation scheme institutes a compensation fund, wholly
financed by the producers of GM crops with an annual parafiscal tax of DKR
100 (? 13.4) per hectare of land cultivated with such crops, to cover the
economic losses due to admixture with GM material. The scheme is
administered by the Danish authorities.

Compensation may be paid only to farmers and if the amount of GM material
exceeds 0.9 % of the conventional or organic crop, which means that the
product has to be labelled as containing GMOs, as provided by EU law
(Regulation (EC) No 1829/2003 on genetically modified food and feed). The
amount of compensation is limited the price difference (based on official
market prices) between the GM crop and conventional or organic crops.

The payment of compensation does not free the GM farmer from any civil or
criminal liability under Danish law. The Danish authorities will in all
cases take action to recover the compensation paid from the farmer from
whose fields the GM material has spread.

The compensation fund will be replaced by private insurance as soon as such
is available. The duration of the compensation scheme is limited to 5 years.

The Commission finds that such aid contributes to a successful co-existence
of GM crops with conventional and organic crops, not the least because it is
wholly financed by the Danish farmers with GM crops and ends when insurance
products covering the risk of admixture become available on the Community
market. Such aid appears to improve the structures of agricultural
production in a way that is compatible with Community policy concerning such
co-existence.

Therefore the Commission has approved the aid on the basis of EU state aid
rules (Article 87(3)(c) of the EC Treaty).

The text of the decisions will shortly be made available on the Internet at
[europa.eu.int]
es under the aid number N 568/2004.

------------------------------------------
Posted to Phorum via PhorumMail