Select Committee on European Scrutiny Ninth Report


COM(00) 604

Draft Council Regulation on the common organisation of the market in the sugar sector.

Legal base: Articles 36 and 37 EC; consultation; qualified majority voting
Department: Agriculture, Fisheries and Food
Basis of consideration: Undated ministerial letter
Previous Committee Report: HC 23-xxxi (1999-2000), paragraph 10 (29 November 2000), HC 93, oral evidence given by the Minster on 20 December 2000, and HC 28-ii (2000-01), paragraph 4 (10 January 2001)
To be discussed in Council: April 2001
Committee's assessment: Politically important
Committee's decision: Cleared


  9.1  For the reasons set out in our Report of 29 November 2000, the Community's sugar regime is extremely complex, and, since it was neither subject to the major reforms which took place in the arable sector in 1992, nor part of the Agenda 2000 reforms of the CAP, it is widely accepted that its reform is long over-due. However, the Commission considers that account needs to be taken of such factors as the financial framework agreed in 1999 in Berlin; the forthcoming round of WTO negotiations on agriculture; and the future enlargement of the Community. It also believes that there is a need to review first the operation of the quota system, and such issues as lack of competition within the sector, which it expects to take until July 2002 at the latest. It therefore proposed in October 2000 that the present regime should simply be continued for a further two years until 30 June 2003, with some modifications (including a relatively small cut in sugar quotas).

  9.2  As we also noted in that Report, the Minister of State (Commons) at the Ministry of Agriculture, Fisheries and Food (the Rt. Hon. Joyce Quin) told us that, although the Government would have preferred to see action taken on price rather than quota levels, it nevertheless supported the broad thrust of the Commission's proposal, including a limitation of the next regime to two years. However, she also expressed concern at the apparent lack of coherence between this proposal and the separate proposal[39] for duty-free access for all products (except arms) from the least-developed countries (LLDCs), and she pointed to the need to assess the impact on the sugar regime of such imports, which were due to be phased in over the next three years.

  9.3  We therefore sought written evidence on this last point from a number of interested organisations, and, on 20 December 2000, we took oral evidence from the Minister of State and from the Minister for Trade (Mr Richard Caborn). This focussed mainly on the "everything but arms" proposal, but the Minister of State again highlighted the lack of coherence between the two proposals, and said that the Government had been pressing for changes to the sugar regime which were consistent with the "everything but arms" approach. Since we were not clear precisely what these changes were, we said in the conclusion to our Report of 10 January 2001 that we would be grateful for further clarification on this point.

  9.4  Since then, we have also recorded in our Report of 28 February 2001 the further information we had received from the Minister for Trade about the changes agreed, with UK support, to the "everything but arms" proposal to reflect some of the concerns which had been expressed. In the case of sugar, the start of the tariff elimination would be deferred until 2006 and completed in 2009, and would be accompanied by global duty-free tariff quotas, increasing from 74,000 in 2001-02 to 197,000 tonnes in 2008-09. In view of the interest in this proposal, and the circumstances surrounding its introduction, we have recommended it for debate in European Standing Committee C, but, in doing so, we also reminded the Minister of State that we had yet to receive the clarification we had asked for as regards the changes needed to the proposal for reforming the sugar regime.

Minister's letter

  9.5  We received on 20 March 2001 an undated letter from the Minister of State on this point. She says that, although the implications of the "everything but arms" proposal need to be taken into account in the reform of the sugar regime, the practical implications would now appear to be modest as a result of the changes which have been made in the former. Thus, to the extent that the LLDC quota increases the availability of raw sugar for refining, there was likely to be a corresponding reduction in the quantities imported from the ACP countries and India under the Special Preferential Sugar (SPS) quota, and amendments may also be needed to manage the interim LLDC quotas. The Minister says that the Government will also press the Commission to ensure that the implications for the sugar regime of phasing out duties on LLDC sugar between 2006 and 2009 are taken into account in its studies on competition in the sugar sector.

  9.6  The Minister has also provided a brief update on the Council's consideration of the sugar reform proposal. She says that the majority of Member States have expressed a preference for a five-year extension, but that there have been no recent discussions, pending a decision on LLDC access and receipt of the European Parliament's Opinion, due in the middle of this month. However, she understands that the Swedish Presidency plans to place sugar on the agenda for the April Agriculture Council.


  9.7  We are grateful to the Minister for this further information, which suggests that the immediate impact on the sugar regime of the amended "everything but arms" proposal is likely to be relatively slight. Since this last point was the main concern we had on the proposal for reforming the regime, we are now clearing this document.

39   (21715) 12335/00; see HC 23-xxxi (1999-2000), paragraph 9 (29 November 2000), HC 93, oral evidence given by the Minister on 20 December 2000, HC 28-ii (2000-01), paragraph 3 (10 January 2001), and HC 28-vii (2000-01), paragraph 2 (28 February 2001). Back

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