THE EUROPEAN Commission has presented its proposals on sugar reform which will reduce the price paid for white sugar by 39%.
The Commission has proposed that the white sugar price is cut in two stages over two years beginning in 2006/7.
Farmers would then receive compensation to the value of 60% of the cut; this would be paid through a decoupled payment which would be linked to environmental and land management standards and added to the single farm payment.
The proposals also include a voluntary restructuring scheme due to last four years designed to encourage less competitive producers to leave the sector.
Finally, the abolition of intervention is also proposed.
The Commission hopes for a political agreement on the proposals at the meeting of agriculture ministers in November 2005.
DEFRA secretary, Margaret Beckett, welcomed the announcement on reform which she said would provide a “sustainable future for the sector”.
“As incoming Presidency, the UK will work hard to bring negotiations to a successful conclusion in line with the Commission aim of agreement in November.
This would strengthen the EU position in the WTO Doha Round talks in Hong Kong in December and contribute to our wider trade and development objectives. Reform is also needed to promote greater competitiveness and bring the sector into line with the CAP reforms of 2003 and 2004.”
Presenting the proposals was EU agriculture commissioner Mariann Fischer Boel who said there “is no alternative to a profound reform”.
“The easy option would be to sit on my hands. But that would mean a slow and painful death for the European sugar sector. I am convinced that EU sugar producers have a competitive future, but only if we act now and act decisively to prepare them for the challenges ahead.
“We are offering a long term, stable planning horizon with a generous restructuring fund to encourage less competitive producers to leave the sector and to cope with the social and environmental impacts of the restructuring process.
“And we will maintain preferences for our traditional suppliers in the developing world. Our market will remain an attractive place for some of them to sell their sugar.”
But Conservative international trade spokesman, Robert Sturdy, said the proposals would be the death of the UK’s sugar industry.
“The price cut will affect Britain more than other EU member states due to factors such as quotas and the size of our sugar industry.
“The worst case scenario for the UK would be a cut closer to 52%. Coupled with the government’s refusal to give compensation to sugar producers directly, the overall effect will be devastating.
“Obviously sugar needs reforming, but it could be done through reducing quotas as well as price in a way that would support production in ACP as well as EU countries.
“We have to cut the amount of sugar produced in the EU, but why couldn’t the reform focus on the largest sugar producers rather than hitting the smallest hardest?”