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Reform of the sugar sector 26/09/2007 - European Union agriculture ministers today backed changes to the sugar restructuring scheme which will make it more effective and thus reduce European Union sugar production to sustainable levels. The restructuring scheme was a key element of the 2006 reform of the Common Market Organisation for sugar, offering producers who would be uncompetitive at the new lower price a financial incentive to leave the sector. Unfortunately, much less quota was renounced during the first two years of the scheme than anticipated and changes therefore had to be made to make it more attractive. The main changes agreed are that the percentage of the aid given to growers and machinery contractors should be fixed at 10 percent, but growers who renounce quota will get an additional payment. Retroactive payments are foreseen, to avoid penalising those who have already given up their quotas. A new element is that beet growers may apply directly for aid from the restructuring fund, up to a certain limit. As an additional incentive for companies to participate, those which renounce a certain amount of their quota in 2008/09 will be exempted from paying the restructuring levy on the part of their quota which was subject to preventive withdrawal in the 2007/2008 marketing year. A two step application for renouncing quota for 2008/09 is introduced, where the first step (deadline 31/1/08) as a minimum has to correspond to the preventive withdrawal decided in March this year in order to be able to participate in the second step (deadline 31/3/08). The Commission will let companies know after the first step to what extent they risk an uncompensated cut in 2010 if they do not participate in the second step. The Commission believes that the changes should allow the renunciation of about 3.8 million tonnes of sugar quota in addition to the 2.2 million tonnes given up so far. If insufficient quota has been renounced by 2010, the Commission will make compulsory quota cuts. The level of these cuts will vary depending on how much quota each Member State had renounced under the restructuring scheme.
07/05/2007 - The European Commission today proposed changes to the sugar restructuring scheme aimed at making it more effective and thus reducing European Union sugar production to sustainable levels. The restructuring scheme was a key element of the 2006 reform of the Common Market Organisation for sugar, offering producers who would be uncompetitive at the new lower price a financial incentive to leave the sector. Unfortunately, much less quota has been renounced during the first two years of the scheme than anticipated and changes therefore have to be made to make it more attractive. The main changes proposed are that the percentage of the aid given to growers and machinery contractors should be fixed at 10 percent, but growers who renounce quota will get an additional payment, paid retroactively to avoid penalising those who have already given up their quotas. A new element is that beet growers could apply directly for aid from the restructuring fund, up to a certain limit. As an additional incentive for companies to participate, those which renounce a certain amount of their quota in 2008/09 will be exempted from paying the restructuring levy on the part of their quota which was subject to preventive withdrawal in the 2007/2008 marketing year. The Commission believes that the changes proposed should allow the renunciation of about 3.8 million tonnes of sugar quota in addition to the 2.2 million tonnes given up so far. If insufficient quota has been renounced by 2010, the Commission also proposes that the level of compulsory quota cut would vary depending on how much quota each Member State had renounced under the restructuring scheme. The Commission hopes that the Council and Parliament can adopt the proposal by October at the latest. Commission proposal [pdf]
21/11/2006 - Mariann Fischer Boel, European Commissioner for Agriculture and Rural Development, called on Monday for renewed efforts by agricultural ministers and the sugar industry to make the restructuring process in the sugar industry a success. A key element in the EU sugar reform, which came into force on 1 July 2006, was the establishment of a restructuring fund financed by sugar producers to assist the restructuring process needed to render the industry more competitive. The objective is to take out about 6 million tonnes of quota in order to ensure balance on the market after a four-year transition period. In the first year of application, about 1.5 million tonnes of quota were renounced under the restructuring scheme. The deadline for applications for 2007/2008 is 31 January 2007, but given that consultations with interested parties could take up to 45 days, restructuring intentions have to be announced by early December. Regrettably, at present the declared intentions to renounce quota for 2007/2008 amount to only 0.7 million tonnes which is far below what is necessary to balance the market.
20/02/2006 - European Union agriculture ministers today formally adopted a radical reform of the EU sugar sector. The reform, which will come into force on 1 July, will bring a system which has remained largely unchanged for almost 40 years into line with the rest of the reformed Common Agricultural Policy. It will ensure a long-term sustainable future for sugar production in the EU, enhance the competitiveness and market-orientation of the sector and strengthen the EU's position in the current round of world trade talks. The key to the reform is a 36 percent cut in the guaranteed minimum sugar price, generous compensation for farmers and, crucially, a Restructuring Fund as a carrot to encourage uncompetitive sugar producers to leave the industry.
24/11/2005 - European Union agriculture ministers today reached political agreement on a wide-ranging reform of the Common Market Organisation for sugar, based on the proposal tabled by the European Commission in June. The reform will enhance the competitiveness and market-orientation of the EU sugar sector, guarantee it a viable long-term future and strengthen the EU's negotiating position in the current round of world trade talks. It will bring a system, which has remained largely unchanged for almost 40 years, into line with the rest of the reformed Common Agricultural Policy. The guaranteed price for white sugar will be cut by 36 percent over 4 years; farmers will be compensated for, on average, 64.2 percent of the price cut through a decoupled payment - which will be linked to the respect of environmental and land management standards and added to the Single Farm Payment; countries which give up more than half of their production quota will be entitled to pay an additional coupled payment of 30 percent of the income loss for a temporary period of five years; a generous voluntary restructuring scheme will be established to provide incentives for less competitive producers to leave the sector; intervention buying of surplus production will be phased out after four years. Developing countries will continue to enjoy preferential access to the EU market at attractive prices. Those ACP countries which need it will be eligible for an assistance plan worth € 40 million for 2006, which will pave the way for further assistance.
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Council Regulation (EC) No 318/2006 of 20 February 2006 on the
common organisation of the markets in the sugar sector
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