4 October 2000
EU proposes sugar quota cuts

By FWi staff

BRUSSELS wants cuts in quota and the abolition of storage, under proposed changes to the sugar regime.

But some commissioners had hoped for greater reform following a damning report by the European Court of Auditors on the cost of the regime to consumers.

The permanent cut in A and B sugar quota of 115,000t amounts to less than 1% of the EUs existing sugar quota, and will have only a limited impact on growers contract tonnages.

But it accounts for about half the EUs structural surplus in sugar.

This will help keep export subsidies within the tight limit imposed by the World Trade Organisation.

The EU is also retaining the right to make further annual adjustments to quota to take account of market conditions.

It did this last month with a 500,000t cut for this season.

Abolition of the reimbursement of storage costs, valued at Euro3.3/t (2/t) of sugar a month, is forecast to save the EU budget some Euro300m (180m) a year.

Another change is the removal of the requirement for sugar processors to keep a minimum 3% stock.

Otherwise, the regime is unchanged, with support prices frozen for the next two years and the system of levies on growers and processors for funding export subsidies maintained.

EU farm ministers have until the end of the year to agree the reform.