SUMMARY
In 2005, we reported shortly after the last reform
of the EU sugar regime had been agreed. We supported the reform
and concluded that, if the price cuts and restructuring process
were successful, EU beet production quotas would become redundant
and should be removed. Even though some of the results of the
reform have not been what was envisaged, we maintain the position
we took seven years ago.
Since 2006, there has been substantial restructuring
but the EU beet processing sector still has substantial over capacity
and is even more oligopolistic than it was. The policy retains
strong features of protectionism. Inevitably, that means that
operators are protected from the market and that consumers must
pay the bill.
Our biggest concern is for the consumer. For several
years following the last reform, the EU price went down, as planned,
but there was no similar decrease in the prices paid by consumers
at the supermarket till. The European Commission must put the
consumer much closer to the heart of its sugar policy and it should,
specifically, put in place a mechanism to assess not only the
market price of sugar but the price paid by consumers.
We are aware of strong views from the health sector
that sugar is a health hazard for consumers, particularly for
children. Whilst accepting the concerns we consider that control
of sugar consumption on health grounds should be achieved via
Member State taxation and regulation policies rather than justifying
EU level continuation of market distortion.
Pricing is far from easy to disentangle and the market
structure is highly concentrated. We consider that the market
situation requires closer attention and would benefit from greater
clarity and transparency. We therefore recommend that the UK's
Office of Fair Trading, in collaboration with colleagues from
other Member States, examine the market as it impacts on UK and
EU consumers.
We learned with some dismay that funds intended to
mitigate the impact of the 2006 reform on certain developing countries
have not, in many instances, been successfully disbursed. The
precise reasons for this are unclear, but we heard that there
had been some problems with the Commission itself. We therefore
urge the Commission to ensure that its own delegations are sufficiently
resourced to support that disbursement and to monitor it closely.
Agricultural, Trade and Development policy decisions
must not be taken in isolation from each other. We fear that they
are. Ultimately, support for developing countries is a matter
for development policy, but must be taken into account during
the negotiation of future agricultural policy.
In the current negotiations on the Common Agricultural
Policy, we firmly support the Commission's approach of abolishing
production quotas in 2015. Import tariffs on raw and refined cane
should be eased as appropriate in response to the world market,
taking into account WTO and bilateral trade talks.
It is likely that there could be strong opposition
in some Member States to the complete cessation of quotas and
calls for continuation of quotas in some form beyond 2015.
Should a compromise be required, we recommend a firm
date between 2015 and 2020 for the removal of production quotas,
an immediate recalibration of these quotas and support to remove
inefficient production. A simple continuation of the status quo
would be unacceptable.
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