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MEPs react warily to sugar reform plans

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Thursday, 23 June 2005

MEPs react warily to sugar reform plans

Members of Parliament's Agriculture Committee gave a cautious response to plans to overhaul the EU sugar market presented by Commissioner Mariann FISCHER BOEL on Wednesday. Drastic price cuts for various products are on the cards as well as transitional measures to restructure the industry, which is being asked to become more sustainable and competitive, in line with the reform of the common agricultural policy.

On prices, Mrs Fischer Boel is proposing a cut of 39% over two years from 2007 for sugar (to €385.5/tonne) and of 42.6% for sugar beet (to €25.05/t). Her predecessor, Franz Fischler, was planning cuts of only 33% and 37%.

The Commission also wants an overall decrease in production, with compensation of 60% of the price cuts. And it envisages setting up a voluntary restructuring plan lasting four years, to be funded through a levy on quota holders. Degressive payments of €730/t in the first year, €625/t in the second, €520/t in the third and €420/t in the fourth will paid to factories to encourage them to close. Part of the funding will also go to beet producers. The African, Caribbean and Pacific countries, which currently benefit from the EU guaranteed price system, will have a special aid plan with €40 million in funding for 2006.

Commissioner Fischer-Boel defended these cuts, saying there was a need to "work for the long term" and not "take the risk of re-opening the issue" in a few years' time. Any failure to reform would have an impact on the entire European sugar industry, she added, as the market is gradually opened from July 2006 to the least developed countries (LDCs), whose prices are much lower than EU guaranteed prices.

MEPs were wary about the proposals, which will be debated at a public hearing on sugar on 13 July in Brussels. Parliament's rapporteur on the subject, Jean-Claude FRUTEAU (PES, FR), already believes the reform is likely to pose problems to the producer countries and that "measures must be taken to preserve the EU from the triangular trade" (whereby the LDCs would re-sell at EU-guaranteed prices the surpluses of other, cheaper, sugar producing countries). Friedrich-Wilhelm GRAEFE zu BARINGDORF (Greens/EFA, DE) fears that the reform will "sound the death knell of the sugar beet industry" and that it represents a first step towards "total liberalisation of the market", paving the way for "the entire world's sugar to flood into Europe".

22.06.2005 Committee on Agriculture
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