Brussels, 29/09/2005 (Agence Europe) - Jean-Claude Fruteau (PES, France) has sent his draft report to members of the European Parliament agriculture committee, which focuses on reform of the common market organisation (CMO) for sugar. Mr Fruteau suggests for a toning down of the measures proposed by the European Commission (25% reduction in the price of sugar instead of 39% and compensation of up to 80% for beetroot planters, as opposed to 60%) and to significantly adapt the “Everything but Arms” initiative to avoid massive imports of sugar onto the Community market from Less Developed Countries (LDCs).
According to the timetable, the draft report will be discussed on 11 October and adopted on 29 November by the agriculture committee for approval by the plenary in January 2006. The European Commission and the British presidency will attempt to convince the EP to speed up the work to enable agriculture ministers to find a political agreement during their meeting on 22-24 November.
The main elements of Fruteau's draft report are as follows:
Prices and quotas: Fruteau suggests a more moderate decrease in white sugar prices, raw sugar and beetroot, namely -25% in two years as from 2006/07 (as opposed to -39% in the Commission's initial proposal). The rapporteur suggests reducing by half the volume of supplementary quotas for isoglucose (150,000 tonnes over three years instead of by 300,000 in the proposal).
Income support: the draft lays down that the national envelope each Member State has for direct payments to beetroot producers will cover 80% of the estimated loss of income resulting from the reduction in sugar prices (compensation of 60% in the Commission's proposal).
Restructuring: the Commission is proposing the implementation of a voluntary and temporary system for the Community sugar sector. According to the Commission, this aid system should benefit EU sugar, isoglucose and inulin syrup producers who want to suspend their production (and therefore not beetroot producers). The draft report plans to revise this restructuring aid upwards (800 euros per tonne in 2006-07, 741 euros/t in 2007-08, 622 euros/t in 2008-09 and 516/t in 2009-10, as opposed to 730, 625, and 420/t in the initial proposal) and to provide a minimum of 10% of this aid for beetroot and chicory to cover the losses linked to investment.
Bioethanol: the rapporteur is proposing a voluntarist policy for developing the bioethanol sector as an opportunity for beetroot planters and businesses in the sector. In this context he is planning on two factors: reserving part of aid from the restructuring funds for supporting reconversion of industrial distiller installations for bio fuels; increasing the amount of direct aid by 45 to 60 euros per hectare per year for energy production and to increase the maximum surface areas reserved for this kind of crops from 1.5 million to 2 million hectares.
Flexible regulation of Community market: the “Everything but Arms” initiative that supports LDCs (opening up of the EU market and removing custom duties or quotas from July 2009) risks producing, through triangular trade evolution and fraudulent imports a “massive and uncontrollable influx” of sugar onto the Community market, affirms Mr Fruteau in his explanation of the goals behind his draft report. This is why he is suggesting an adaptation of this initiative by way of extending (by 6 years, up to 2015) the phase when sugar exports from LDCs are covered by quotas and when customs duties will be gradually reduced. In parallel, Mr Fruteau is proposing that export quotas are increased by 20% a year, as opposed to the current 15%, in order to increase the export potential of these countries.
The rapporteur is calling for the implementation of a safeguard clause that limits quantities to a net export level (difference between sugar quantities produced and the usual levels of consumption). These mechanisms (according to Mr Fruteau, will help reduce fraud while guaranteeing LDCs and their local workforces in the sugar sector to benefit from the preferential trade agreement with the EU) will allow a Member State to request a suspension of these concessions if the volumes imported from the LDCs upset market balance.
The parliamentary development committee also adopted on 27 September the report by Bernard Lehideux (ALDE, France), calling for an increase from 40 to 80 million euros in the aid planned by the European Commission in 2006 to support ACP countries affected by reform of the Community sugar regime.