THE ENVIRONMENT, Food and Rural Affairs Committee has concluded in a new report the existing EU sugar regime is unsustainable.

Changes are urgently required to allow the European Union to honour its existing and future international commitments, the report states.

But the MPs are not in favour of immediate and full liberalisation of the sugar sector.

While they regard it as important that sugar policy moves in the direction of liberalisation, they consider a complete deregulation of the sugar sector in a single step unrealistic.

Instead, the committee recommends in its report the following changes to the existing arrangements:

  • Phasing out of the quota system
  • Reduction in the internal market price
  • Lowering of the import tariff rate

Price reductions would be phased in over time, with production quotas only being lifted when a market balance had been achieved.

Flexibility to lower import tariff rates is seen as being particularly important with respect to the ongoing trade negotiations.

The committee also recommends that:

  • Transitional aid programmes should be established to assist the African, Caribbean and Pacific countries which will be affected by changes in the sugar regime
  • Some form of producer compensation will be required to help EU sugar beet growers adjust to the new market conditions
  • The competition authorities should conduct an investigation into the UK sugar industry, if production quotas are not abolished

On publication of the report, the chairman of the sub-committee that conducted the inquiry, Paddy Tipping MP, said: “All the evidence shows that change is inevitable.

“Put bluntly, the present arrangements are unsustainable. They do not fit well with the changing CAP and may be in breach of international trade agreements.”

“The question we are now faced with is how best to prepare for change.

“We are advocating price reductions and quota abolition, phased in over time, as this provides the UK sugar industry with the best opportunity to adapt to meet its future challenges.”

Mr Tipping added: “There is an awful lot of talking still to be done, but sugar beet producers and processors need to be thinking about the future.”