Sugar quotas to be scrapped

By David Haworth, in Brussels

The European Union’s (EU) confectionery sector has welcomed the agreement of an EU farm reform package – billed by the European Commission as a “new and fairer direction for the Common Agricultural Policy” (CAP) – which ends the sugar quota regime by 2017.

A key element of the deal, CAOBISCO, which represents Europe’s confectionery and biscuit makers, welcomed an end to this “distortion” in production caused by quotas.

The CAP reform package “will ensure a more market-orientated environment which is a prerequisite for economic growth. In the run-up to the ending of quotas the EU authorities should take appropriate management measures to guarantee sufficient supplies of agricultural ingredients to meet the industries demands and enable CAOBISCO operators to be competitive on the internal and world markets,” said the industry association.

Meanwhile, the European Sugar Users association (CIUS) said: “It will allow the EU sugar sector to play an increasingly important role in the world markets.”

Until recently it looked like the two-year-long negotiations were set to force the Commission to extend the quotas to 2020, allowing plenty of time for the sector to adjust as it moved away from the sugar reform deal established eight years ago.
But with milk quotas expiring in 2015, EU ministers, MEPs and agriculture officials agreed to end sugar quotas on September 30, 2017.

A Commission note said the measure “will improve competition for EU producers on the domestic and world market alike”, with the sugar sector in future being strengthened through long-term contracts and mandatory interprofessional agreements.
Meanwhile the sector’s current arrangements will remain and existing contracts will be maintained until the changeover takes place, EU officials pointed out.

The oncoming liberalisation would “provide the sector with a long-term perspective,” said the Commission. “Ample supplies on EU domestic markets at reasonable prices will also benefit the intermediate and final users of sugar.”
It added that “to provide added security”, standard provisions written into EU sugar regulations “for agreements between sugar factories and [beet] growers will be maintained.”

Furthermore, it explained that after the quotas are scrapped, white sugar will remain eligible for private storage aid, should market prices drop significantly – maybe reducing the price falls hoped for by confectionery manufacturers.
However, on the plus side, “Most developing countries will continue to enjoy unlimited duty-free access to the EU market” for their sugar exports, stressed the Commission.

Mairead McGuinness, member of the European Parliament’s agriculture committee described the struggle between the European Commission, the Council of Ministers and the European Parliament to set the CAP’s future as “damn” tough”.
Despite the safeguards, sugar beet growers are still unhappy. Gerd Sonnleiter, the president of the EU committee of professional agricultural organisations (COPA) said: “I’m pleased to see the EU sugar quotas extended slightly, but it’s not for long enough.”