Brussels, 24/03/2003 (Agence Europe) - Specially made for the European Commission to assess the different solutions for reform of the common market organisation (CMO) for sugar, that must be presented each year, a study made by a German research centre, the European centre for research in agricultural, regional and environmental policy (EuroCare, Bonn) recommends the abolition of production quotas, a fall in support prices (to avoid subsidised exports) and the establishment of direct aid for all sugar beet crop areas after the fashion of that which exists today for arable crops. EuroCare assessed the economic consequences of six solutions that could be envisaged for reform of the CMO for sugar:
gradual reduction of quotas in order to dismantle export refunds and provide market opportunities for the trading partners;
fall in support prices in order to reach the two same objectives;
fall in prices with partial compensation linked to quotas, according to the principles of the Agenda 2000;
combination of solutions 1 and 2, with partial compensation;
inclusion of sugar beet in the arable crop system, including set aside, with abolition of quotas, support price cutting and partial compensation;
total liberalisation without any Community intervention.
Even if all these solutions were to bring consumers and the food industry advantages compared to the current situation, the authors of the study consider that the fifth option would be the best as it would allow economic gain of EUR 1.8 billion. Over the transitional period for the acceding countries, it could be justified to maintain the quota system several years in order to avoid undesirable effects on the market, the EuroCare study states. The first solution is considered "inferior to the others" with overall economic gain of EUR 67-221 million annually; options two, three and four do not seem to be the best; and, as for the last, (complete liberalisation of the sugar market), it would cause a "fall in agricultural income and the greatest pressure for adjustment on the sugar industry".
Study recommends passing to aid per hectare in olive oil sector
While the Commission hopes to present proposals during the second quarter of this year on reform of the olive oil sector, a group of Belgian consultants (ADE) recommends single aid per hectare in a report, without modulation depending on quality, but linked to compliance with good farm practices. The aim is to: ensure fairer income for olive growers of the various producer countries while recommending a less intensive method of production that is more environmentally friendly. In its assessment on the quality of the study, the Commission considers the analysis made in this report to be a serious one, although it rates the reliability of the figures given as "poor".
According to the experts, replacing the aid system per tonne of oil produced by aid per hectare would allow olive growers to orient their production decision depending on the market price alone, in conformity with the principles set out in Agenda 2000. It is recommended that this aid should be identical for all olive growers, in order to ensure fairer additional income for the producers of regions where agronomical conditions are the most difficult. As the sales price varies depending on the different categories of oil, the authors of the study consider that aid modulation relating to quality is not necessary, on condition that the information provided to the consumer is precise, reliable and homogenous throughout the Community. Furthermore, the ecological risks associated to olive production could be considerably reduced if a code of good farm practices specific to the olive sector were developed. Experts suggest that an additional premium per hectare should be established in a second time for olive growers that comply with these practices, even making aid per hectare subject to compliance with these practices if the ecological risks are considered serious. The other recommendations presented in the study include: - improved statistics on the sector; - the analysis of the environmental effects of milling olives and of other industrial activities in the sector; - inclusion in the regulation of the fact that authorisation of mills is subject to implementation of the provisions for processing and disposing of waste waters; - the creation of aid to maintaining the olive growing activity in areas threatened with desertification; - and the maintenance of aid to private storage in manifest crisis situations.
The study recalls that the EU today ensures 80% and 70% respectively of olive production and consumption worldwide. It is the main outlet for exports from other producers of the Mediterranean basin and is itself a major exporter to the US, Brazil, Australia and Japan. (The study is available on the DG Agriculture website: http://www.europa.eu.int/comm/agriculture/eval/reports/oliveoil/index_en.htm ).