Brussels, 26/07/2004 (Agence Europe) - During the Agriculture Council last week, Member States, including France and Germany opposed reform of the sugar sector form July 2005, as proposed by the European Commission (EUROPE 21 July 2004 p 10). Only a few Member States (Denmark, Sweden, United Kingdom mainly) thought the proposals went in the right direction. A significant number of other countries underlined the importance of finding out the results of the contentious procedures begun at the WTO as well.
Here is a detailed summary of the positions taken at the Council on 20 July:
Calendar of reform: Ministers of Agriculture from ten countries (France, Germany, Portugal, Greece, Ireland, Austria, Netherlands, Finland, Lithuania, Slovakia) declared that reform should not enter into force before the expiration of the system, expected on 30 June 2006. In the opposing camp, Denmark, was seeking a total liberalisation of the system when it began in 2005. The United Kingdom considered the communication as "an important step in the right direction" and called on the Commission to rapidly present legislative proposals. Sweden is calling for a liberalisation of the production and a gradual elimination of quotas (as well as a decrease in the compensation planned at this stage for the producers). The Netherlands, was in favour, over all, of the main thrust of the reform but described the price reduction timetable as being too short (3 years). Germany agreed with the reform objectives (a more sustainable sector and the reduction of the significant gap between world and Community prices) but has requested clarification about the modalities for paying compensation.
Price reduction: Commission proposed price reductions (-33% in three years for the institutional price reduction of sugar and -37% in three years for the minimum price of beetroot) were judged as being too drastic, notably, by Italy and Portugal (which requested a variable rate according to the country), Hungary, Finland and Lithuania. Ireland described the planned reductions and being "unacceptable) and Spain, whose price reductions risked leading to the abandoning of production in certain regions. France (followed by Germany and the United Kingdom) pointed out that price reductions would have a negative impact on ACP countries.
Quota reductions: Austria considered that the proposed quota reductions (from 17 to 14 million tonnes) risked significantly penalising beetroot producers. Italy said that it was in favour of maintaining the quota system. Finland considered that reduction should be limited to the strictly necessary. Poland has reservations and called for quota B (for exports outside the EU) to be the only quota significantly reduced by decreasing the amount of export refund.
Quota transfers: the Commission proposal to authorities the transfer of quotas between countries was criticised by the new Member States (including the Czech Republic, Lithuania, Slovenia, Poland and Hungary), as well as Ireland and Finland. All the countries believe that in substance this possibility will concentrate on production in some of the large producer Member States.
Compensation aid to producers: Portugal, Greece, Lithuania, Greece, Lithuania, Hungary and Slovenia described that the amount planned for compensatory aid (60% of the loss in income by compensation by a single payment per farm) was insufficient. Spain that that the system envisaged a decoupling f aid and risked having negative effects for low production farms or for countries that had sugar deficits. Sweden was the only country that clearly made known that the amount of compensation was too high in its opinion.