Boel urges acceptance of EU sugar reform

By Anthony Fletcher

- Last updated on GMT

Related tags: Sugar, European union, European commission, World trade organization, Eu

EU commissioner Mariann Fischer Boel has urged the agricultural
council to adopt bold sugar reform ahead of tomorrow's crucial
meeting.

A political agreement is seen by both sugar users and political officials as vital in order to right an iniquitous system of tariffs that has hampered the food industry.

"It is crucial that we reach a decision next week,"​ said Commissioner Mariann Fischer Boel.

"The negotiations will be tough, but I urge ministers to be bold. The sugar sector has remained largely unreformed for 40 years. We need reform now to ensure that sugar production has a future in Europe and to give sugar producers both in Europe and in developing countries long-term certainty."

The current EU sugar regime expires in July next year. With EU prices set at three times world market levels, it has become increasingly clear that such trade distorting practices have become unsustainable.

Food industry groups such as the UK Industrial Sugar Users Group (UKISUG) have long demanded change.

"The current system harms UK competitiveness and costs jobs,"​ said Richard Laming, spokesperson for the UK Industrial Sugar Users Group (UKISUG). "16,000 jobs have been lost in the confectionery sector in the last five years. We desperately need reform."

UKISUG claims that the current system restricts the supply of sugar in the EU and inflates its price, increases the cost to British consumers by some £600 million each year and harms the competitiveness of European industrial users of sugar.

Laming is keen to stress that it is the structure of the current system that leads to market distorting prices and practices.

"The argument at the moment is not about the detail but about making a substantive political point. The mindset we need to have is that the sugar regime is not just about those that grow and process sugar - it should also take into account the entire manufacturing chain."

Manufacturers using sugar in processed products account for about 70 per cent of usage in the UK or nearly 1.2 million tonnes. Industrial users, says UKISUG, are therefore major stakeholders in the sugar regime.

Boel believes that the reform on offer is fair.

"We will maintain preferences for our suppliers in the developing world and our market will remain an attractive place for them to sell their sugar,",​ said Boel. In addition, there will be a 39 percent price cut over two years beginning in 2006/07 to ensure sustainable market balance.

There will also be a voluntary restructuring scheme lasting four years for EU sugar factories, and isoglucose and inulin syrup producers, consisting of a high degressive payment to encourage factory closure and the renunciation of quota as well as to cope with the social and environmental impact of the restructuring process.

This payment will be €730 per tonne in year one, falling to €625 in year two, €520 in year three and €420 in the final year.

Proposals for reform of the EU sugar regime were first published by the European Commission on 22 June 2005. These were designed to bring it into line with other already reformed CAP sectors, as well as helping to meet the EU's existing WTO obligations and providing a platform for further progress on the Doha Round at the Hong Kong WTO Ministerial in December.

" There is no alternative to far-reaching reform,"​ said Boel. "If we change now, we do so on our own terms, with money in the pot to ease the pain.

"If we fail to act, a reform will be forced upon us over which we will have little control, and which will hit the most competitive producers hardest."

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