Brussels, Belgium
February 23, 2007
The Management Committee for Sugar
voted yesterday on an urgent proposal presented by the European
Commission that would encourage producers to reduce sowings for
sugar production during the 2007/08 marketing year by at least
two million tonnes, corresponding to 13.5% of the EU sugar
quota, in order to avoid probable major surplus production.
The Commission has however
provided for an "escape clause" from withdrawal by providing
that sugar producers who voluntarily reduced their production by
13.5% under quota will not be subject to withdrawal. This
provision is intended to ensure that beet growers and sugar
processors do not sow and do not contract for more than 86.5% of
their quota. This will then reduce production and thus alleviate
the sugar surplus in the upcoming marketing year 2007-2008.
At the same time, the
Commission has decided to recognize the effort that certain
Member States and operators have undertaken to improve the
market balance in the future by renouncing sugar quotas under
the restructuring process which formed a central part of the
sugar reform agreed in November 2005. Consequently, those Member
States where the quota reduction has been more than 50% will not
be subject to withdrawal and can therefore produce their full
quota. The 50% threshold was recognised by the Council as
representing a special effort and formed part of the agreement
in November 2005, triggering additional support for the affected
regions and growers.
In those Member States where
the renunciation of quota is less than 50% the withdrawal figure
will be reduced proportionally to their reduction of quota. This
means that if the quota has been reduced by say 25% the
withdrawal figure for such a Member State will be fixed at 6.75%
i.e 50% of the general withdrawal figure of 13.5%. This means
that sugar under quota can be produced up to 93.25% in this case
without triggering any withdrawal.
Those Member States where no
reduction of quota has been undertaken will have to reduce their
production by 13.5% in order to avoid withdrawal.
In October 2007 the final
figure for withdrawal will be fixed. If such a figure is higher
than 13.5%, all sugar producers will have to reduce by the same
additional percentage without regard to the renunciation of
quota.
Without this measure the
Community sugar market would suffer a major surplus situation
which would severely affect the whole sector and put at risk the
ongoing reform process. It is now hoped that sugar producers and
beet growers will make a common effort and areas sown to sugar
beet would be reduced considerably.
As announced by Commissioner
Fischer Boel on 29 January (see
IP/07/103), besides taking this urgent measure it is also
necessary to amend the rules related to the restructuring scheme
as well as the basic sugar regulation (Regulation 318/2006). In
the near future the Commission will come forward with proposals
with a view to making the Restructuring Fund more attractive for
less competitive operators and to refine the rules of
withdrawal.
In this process the Commission
will bear in mind the need to acknowledge, similarly to the
withdrawal decided today, the substantial restructuring effort
already made by some operators in certain Member States. It
should in that context be taken into account that the Council
has in the past acknowledged that Member States for which the
national sugar quota has been reduced by more that 50% have
deserved special treatment.
RELATED USDA/FAS GAIN report:
EU agrees to mandatory 2007/08 sugar production cuts |
