Strasbourg, 25/09/2007 (Agence Europe) - The European Parliament wants the sugar sector industry and farmers to be genuinely encouraged to reduce their production when that proves necessary, and it has called for the sacrifices already made by some producers to be taken in this restructuring process. In Strasbourg on Tuesday 25 September, the EP adopted two reports by Katerina Batzeli (PES, Greece) on the proposal to relaunch the restructuring plan for the sector, largely confirming the position taken at the start of September by the agriculture committee (see EUROPE 9494). EU agriculture ministers will try on Wednesday 26 September to finalise an agreement on the restructuring of the sugar sector.
The EP adopted around 30 amendments to the European Commission's original proposal, essentially to improve compensation awarded to producers who agreed to give up growing sugar: - producers should receive 25% of aid for restructuring (rather than the 10% proposed by the Commission and the 50% called for by the Parliamentary committee); - the additional payment to beet producers rises from €237.5 (in the proposal) to €260 per tonne of quota given up (this aid could continue until 2009-2010, say MEPs); - the aid for diversification paid to the regions affected by this restructuring remains at €109.5 per tonne of quota until 2009-2010 (the regulation adopted in 2006 provided for a phased reduction in aid to €78 in 2009-2010).
To encourage as wide as possible abandonment of quotas in 2009-2010, full payment of the compensation award of €625 per tonne of quota given up should be made to producers, even when production units are not fully dismantled. The EP also wants full payment for producers who convert their facilities to bioethanol production (currently, aid compensates 35% of losses). The EP also has put in place a two-stage procedure for full and compulsory reduction of national sugar quotas in 2010. Initially, the reduction will only concern those countries and producers who have not sufficiently reduced their 2008-2009 quotas. Then, in the second stage, quota renunciations for 2006-2007 and 2007-2008 would not be included in the calculation of the final reduction in quotas. The EP also calls on the Commission to take any decision on withdrawals for 2008-2009 by 4 February (rather than 16 March as in other years), so that beet growers can act accordingly before the sowing season. Finally, ahead of liberalisation of imports from ACP countries and least developed countries in 2009-2010, the EP has called for the mechanism allowing preventive withdrawal of part of production in the event of a surplus on the European market to be extended until 2015.
European Agriculture and Rural Development Commissioner Mariann Fischer Boel defended her proposal on aid for restructuring, which she said was a “big carrot” for the sector. “Farmers will have the possibility of getting 10% of the restructuring fund, and the restructuring fund for the year 2008-2009 is €62.5. €62.5 plus the top-up that we pay from the restructuring money - €237.5 - comes to €300 per tonne that the farmers send back to the Commission,” she said.
She went on: “What I consider the most important thing is that, for the first time, farmers can trigger the restructuring fund. This has not been possible before. Previously, it was only the industry”. Ms Fischer Boel stated: “Now farmers can say 'I want to leave and I want my €300 per tonne, and I get the compensation for the reduction in prices on top of that'”.
The Commission has therefore refused the EP amendments that aim to increase aid for sector restructuring. “This is a very interesting offer for growers and I don't see the need to go further”. Either the producer accepts the offer and the payments that accompany it in 2010 or the Commission will be obliged to reduce quotas without compensation to the sector.
Ms Fischer Boel proved willing to accept certain suggestions and improvements proposed by the European Parliament: taking retroactivity into account to ensure that companies or sugar beet growers who have already participated in the restructuring programme during the first campaigns (2006/07 and 2007/08) are not penalised from 2008/09 (when the rules change); the eligibility of inulin syrup and chicory producers to receive back payments; individual restructuring will be taken into account in case of an obligatory final quota cut.
Fischer Boel said that she completely agreed with the ideas of some MEPs (particularly the British Conservative, Neil Parish), according to which alternative solutions for sugar beet production are much more attractive today than over recent decades, given the high price for cereals and oil seed. The Commissioner also said: “Therefore, I presume that farmers will make their calculations and look at the bottom line of the most attractive way of arranging their future production”. (lc)