Brussels, 24/06/2004 (Agence Europe) - On 14 July, the European Commission is to adopt a communication by Commissioner Franz Fischler on an ambitious reform of the sugar regime, starting during the marketing year 2005/2006. According to a draft document, the Commission suggests: -a reduction of the support price by 33% over three years; -a 37% reduction in the minimum sugar beet price; -a reduction of production quotas by 2.8 million tonnes. The Commission also plans to compensate 60% of lost revenue of producers, in the form of decoupled direct aid to production, and grant restructuring aid to processing units.
Sugar prices: The Commission proposes an end to public purchases and the intervention price (632 EUR a tonne currently, which is three times the current world price). The intervention price, it is proposed, will be replaced by a sugar reference price, used to determine the minimum price of sugar beet to production, the trigger level for private storage, border protection and the guaranteed price for preferential imports. The institutional price of sugar would be reduced from 632 to 506 EUR/tonne in 2005/2006 (a drop of 20%), then to 421 EUR in 2007/2008 (-33% in total). The minimum price of sugar beet would fall from 43.6 EUR/tonne to 32.8 in 2005/2006 (-25%), then to 27.4 EUR in 2007/2008 (-37% in all).
Production quota: The Commission thinks the production quote should be brought into line with the volume of consumption. Thus the current quota, 17.4 million tonnes, would be reduced by 1.3 million tonnes in 2005/2006, then by 0.5 a year, to achieve a total reduction of 2.8 million tonnes. A and B quotas would be replaced by a single quota. An increase of 100,000 tonnes per year in isoglucose quotas is planned.
Compensation: The sum total of aid to compensate 60% of lost revenue will be:
895 million EUR in 2005/2006 and 2006/2007: 154 million for Germany, 150 million EUR for metropolitan France, 80 million EUR for Italy, 60 million EUR for Spain, 18 million EUR for Greece, 4 million EUR for Portugal, 64 million EUR for the United Kingdom, 41 million EUR for Belgium, 19 million for Denmark, 8 million EUR for Finland, 21 million EUR for Sweden, 11 million EUR for Ireland , 41 million EUR for the Netherlands, 19 million for Austria, 99 million EUR for Poland, 28 million EUR for the Czech Republic, 25 million EUR for Hungary, 4 million EUR for Latvia, 7 million EUR for Lithuania, 12 million EUR for Slovakia, and 3 million EUR for Slovenia.
1.340 billion EUR from 2007/2008: 241 million for Germany, 234 million EUR for metropolitan France, 119 million EUR for Italy, 86 million EUR for Spain, 26 million EUR for Greece, 6 million EUR for Portugal, 93 million EUR for the United Kingdom, 62 million EUR for Belgium, 30 million for Denmark, 12 million EUR for Finland, 30 million EUR for Sweden, 16 million EUR for Ireland, 63 million EUR for the Netherlands, 29 million for Austria, 142 million EUR for Poland, 39 million EUR for the Czech Republic, 36 million EUR for Hungary, 6 million EUR for Latvia, 9 million for Lithuania, 17 million EUR for Slovakia and 4 million EUR for Slovenia.
Concerning international commitments, the Commission hopes to keep the provisions of the sugar protocol signed with the ACP countries, and the agreement signed with India. It also plans to look into the possibility of launching specific programmes, funded by the European Development Fund (EDF), to help the ACP countries to adapt to the new market conditions (similar to the set-up in the banking sector). Furthermore, EU operators will by sugar from the least developed countries (LDCs) taking part in the "Everything But Arms" initiative. The Commission also proposes to bring in a tariff quota for preferential imports from the western Balkans.
The effects of the reform: Taking account of the "Everything But Arms" initiative, the EU's annual imports from the supplier countries will increase from 1.8 to 2.4 million tonnes. The proposed reductions of the support price and quota would, according to the Commission, lead to a considerable drop in Community production (from 20.5 to 17.5 million tonnes per annum). At the same time, subsidised EU sugar exports will drop to 2 million tonnes a year.