Strasbourg, 04/09/2007 (Agence Europe) - On Monday 3 September the European Parliament's agriculture committee introduced a number of improvements to the European Commission's recent proposal on relaunching the sugar sector restructuring system (EUROPE 9421). Members of this committee called for an increase in aid for restructuring businesses and compensation to farmers who agree to produce less sugar. On 25 September the European Parliament is expected to vote on the reports of Katerina Bazeli (PES, Greece) on this dossier. The adoption of the EP's opinion will then allow the Council to reach a compromise on what improvements to introduce to they sugar sector restructuring system (EUROPE 9470 on majority support of member states for the Commission's proposal).
Last May the Commission adopted a proposal to provide businesses and producers with greater incentives to give up sugar production. In cases where reduction quota targets are not reached, the Commission will proceed to a linear reduction in EU member state production quotas. According to members of the parliamentary agriculture committee, the restructuring regime works has to be greatly improved in order to avoid an “arbitrary” fall in quotas in 2010, which would penalise the different actors in the European sugar sector. The restructuring regime aims to provide financial incentives to less competitive producers who leave the sector. It has meant the sector has only been able to withdraw 2.2 million tonnes (t) from the market in the first two years whereas the target is a 6 million reduction by 2010.
Optimising restructuring. To encourage greater abandonment of quotas, the reports by Ms Batzeli is planning for businesses to introduce a two-stage restructuring plan: those which have already renounced quotas should be able - once the forecasts for 2008/2009 have been published - to increase their applications for renunciation by 30 April 2008. Amendments will also increase restructuring aid introduced in 2006 to €625 instead of €218.75 for 2008/09. The committee also stresses the need for undertakings to devise business development plans to diversify revenue and employment. It adds that restructuring plans must be prepared in consultation with producers who must be informed about their future before the sowing period.
Boosting aid to producers and regions. The Commission is proposing that 10% if restructuring aid has to go exclusively to producers and sub-contractors. The committee's amendments called for growers to receive 50% of the aid paid under the restructuring fund. The committee wants to increase from €237.5 to €260 euros per tonne of quota renounced the additional aid to beet growers - which the Commission proposes to grant for 2008/09. They also call for aid for diversification paid to the regions affected by restructuring to be kept at the current level of €109.5 per tonne of quota for sugar renounced up to 2009/10 (the regulation adopted in 2006 provides for this aid to fall to €93.80 in 2008/09 and €78 in 2009/10).
Small growers and bioethanol. Under the Commission proposal, beet growers will be able to take the initiative to renounce quotas up to 10% of the undertaking's quota. MEPs believe that in this context priority must be given to small-scale growers so that they can renounce on favourable terms the right to transport beet. The committee also calls for 100% compensation in the case of firms which partially dismantle their production facilities provided they shift towards bioethanol production. Until now, the aid granted for partial dismantling was 35%.
Linear reduction of quotas in two stages. If a linear reduction of national quotas is needed in 2010, the Agriculture Committee believes this too should be carried out in two stages. The first stage should concern only Member States or undertakings which, for 2008/09, would not have made a voluntary renunciation or would have renounced less than 13.5% of their quota. In a second stage, the formula proposed by the Commission would be used. The Agriculture Committee also proposes taking into account any renunciations made by Member States and undertakings when calculating the final reduction.
In view of the full entry into force by 2010 of the “Everything but arms” agreement that enables less developed countries to export sugar to the EU without duty, the EP agriculture committee believes that it is indispensable to extend the application of the mechanism to allow for the preventive withdrawal of part of production in the event of a surplus on the European market. (lc)