The EU’s cotton regime will have to be re-reformed. The European Court of Justice has ruled against changes to the way the sector receives aid under 2004 reforms. To ensure continuity for producers the effects of the annulment have been suspended until a new regime can be worked out. The new system was to have partially severed the link between the quantity of cotton grown and the subsidy farmers receive – more crop leading to more money. The Common Agricultural Policy reform in 2004 was agreed with a lot of difficulty. It also adjusted payments for tobacco and olive oil.
Spain had asked the court to strike down the cotton new regime. It is Europe’s second cotton producer, with Greece. Subsidies are the object of widespread criticism from those who say they encourage over-production and distort competition in the market.
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