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Sugar Beet

2.46 p.m.

The Lord Bishop of Southwell asked Her Majesty's Government:

What assurances they can offer British sugar beet growers that they will not be unfairly discriminated against in the forthcoming reform of European Union sugar policy.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, the European Commission is not now expected to put forward formal legislative proposals on reform of the sugar regime before June. That is following the outcome of the WTO appeal panel. In determining the UK negotiating position, we will be looking for measures that ensure fair treatment for all concerned, including UK beet producers and our traditional ACP sugar suppliers, as well as consumers and taxpayers.

The Lord Bishop of Southwell: My Lords, I thank the Minister for his reply. Given that the UK sugar beet growers are among the most efficient in the EU and make a valuable contribution to the rural economy, and bearing in mind the potential for ministerial discretion in the Commission's White Paper for implementing partial compensation for cuts in price, will the Government strive to ensure that any quota reductions are targeted at countries producing exportable surplus and take steps to guarantee that the growing of sugar beet in the UK continues to be viable?

Lord Whitty: My Lords, the Commission's White Paper is by no means necessarily the same as what the Commission's propositions will be, which will also have to take into account the findings of the WTO appeal panel by other sugar-producing nations against the current EU regime. It will not be an attainable negotiating target, with the majority of EU countries
 
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producing sugar beet, to have only those countries that produce an exportable surplus subject to quota reduction. There will be some sophisticated negotiations about that, and we will seek to protect UK sugar beet producers as far as possible, but I do not think that some of the simplistic formulae that are being produced by the industry are negotiable.

Lord Palmer: My Lords, will the Minister ensure that there is a viable alternative for our sugar beet producers in such things as providing bioethanol for road transport fuels?

Lord Whitty: My Lords, the Government are very much in favour of developing biofuels of all sorts, including bioethanol, which among other feedstocks could use sugar beet. The House will know that we are already under discussion about whether we could introduce a road transport renewables obligation, which would help to kick-start a serious market in biofuels for transport. Sugar beet producers, among others, should benefit from that.

Lord Sewel: My Lords, does the Minister accept that the sugar regime is perhaps one of the most iniquitous aspects of the common agricultural policy? Maintaining a totally artificial price for European producers works to the advantage of some European producers and to the disadvantage of developing world producers. In this case, the slogan ought to be, "The more radical reform, the better".

Lord Whitty: My Lords, I agree. The sugar regime has been the least reformed of all the CAP regimes. The bulk of them have now been reformed as a result of the negotiations two years ago, and the reforms are about to be put into practice. Sugar has to become part of that, and it is no longer tenable for us to maintain a European sugar price that is three times the world level. That leads not only to countries being excluded from the European market, but to European surplus being dumped, again to the detriment of the third world.

The Duke of Montrose: My Lords, in the negotiations on the reform of the sugar regime, will the Government follow up on the need for quota trading within Europe and, if so, on what timetable? When will it be established?

Lord Whitty: My Lords, all questions of timetable are clearly subject to negotiations. The UK Government would like to see tradability of quotas, if the quota regime exists at all. Even better, we would like to see the end of quotas, so that the most efficient producers—those include many of the British producers—would survive in Europe while giving greater access to the sugar industries of the third world.

Lord Livsey of Talgarth: My Lords, I am sure that the Minister will agree that we are talking about the survival of the sugar beet industry in the United Kingdom, as well as being fair to the ACP countries.
 
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What percentage drop in quota in the price of sugar do the Government believe could result in a sustainable sugar beet industry in the UK and remain fair for the ACP countries? Some commentators have said that a level at about half of that proposed by the Commission would achieve that objective. Are the Government working towards that?

Lord Whitty: No, my Lords, we are not working towards that figure. As I said, the European price is three times the world price. The Commission White Paper will propose a cut of 33 per cent, which would allow the most efficient parts of the European sugar beet industry to survive, as well as the most efficient suppliers from ACP and other least developed countries.

Given that we have slightly more time, I should say that I intended to point out that today is the birthday of the noble Duke, the Duke of Montrose. He is looking very sprightly, and I am glad to see him being part of the debate. I apologise for not reacting more quickly.

Lord Faulkner of Worcester: My Lords, is my noble friend aware that his commitment to the interests of the ACP producers will be particularly welcomed in the Caribbean? Can he give an assurance that his department will talk to governments such as that of Jamaica—8 per cent of the population there is dependent directly or indirectly on sugar cane growing—and assist them in their wishes to help with the transition of the growers into future activities? If the sugar cane industry collapses in such a country, the social unrest will be inconceivable.

Lord Whitty: My Lords, colleagues in DfID and I have been talking for some time to Jamaica and other Caribbean and ACP producers. The Commission has proposed an outline action plan for helping adaptation in those parts of traditional suppliers where the viability of the industry needs to be upgraded substantially, or where they need to adapt to other crops. The kind of catastrophe to which my noble friend refers could occur in some of our most loyal and traditional suppliers otherwise.

Lord Stoddart of Swindon: My Lords, would it not be better for farmers in this country, and farmers and consumers throughout the world, if we abolished the CAP and repatriated agriculture to the individual countries?

Lord Whitty: My Lords, significantly, the recent deal on most of the regimes in the CAP repatriates policy to the UK or member states, by moving away from production-related subsidies that are determined in great detail and with great bureaucratic difficulties in Brussels and towards giving farmers a single-farm payment against which they decide which crop to grow or animals to rear. Regrettably, sugar is not yet part of that regime. It is part of the UK Government's objective to make it so.

Baroness Byford: My Lords, from the Minister's earlier answer with regard to the ACP countries, am I
 
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to understand that they will be dealt with in a different way from countries such as Brazil? Unless they are, they will certainly be the losers compared with Brazil and other countries that are considered less developed.

Lord Whitty: My Lords, there is an agreement for preferential access for ACP countries. There is also an agreement in everything but arms, covering sugar, which would extend that to other less developed countries but not to countries such as Brazil. Only if there were complete liberalisation would Brazil sweep the market. That would be subject to a negotiation within the WTO that has not occurred and is unlikely to occur as part of the reform of the sugar process. There will be changes in the supply system from third world countries, but we should maximise the degree to which we can support our traditional suppliers in that area and other less developed and sophisticated producers.

Lord Greaves: My Lords, the tenor of the Minister's answers has been that, in future, we will grow less sugar beet for sugar in this country. Is there not another reason why that should take place—that sugar itself is not always a healthy part of diets? If a lot less sugar were consumed in this country, its population would be a great deal healthier.

Noble Lords: Oh!

Lord Whitty: My Lords, I am not sure that that view has universal consent in this House. There is something in what the noble Lord says. However, it depends what you use sugar for and what food you put sugar on and in. I am sure that he is well versed in those nutritional guidelines and I hope that other Members of the House follow his good example, but I do not think that we can achieve those nutritional objectives by fiddling with the sugar regime.

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