Brussels warns of further sugar cuts

Sugar beet producers are facing a further cut in their quotas for 2010 unless processors give up more quota under the EU’s voluntary restructuring scheme.

Latest figures from Brussels show that, so far, EU processors have renounced 4.8m tonnes of quota since sugar reform was agreed in 2005.

But the EU Commission is after 6m tonnes, to make sure it complies with WTO rules on the amount of sugar that can be exported with export subsidies.

Imports of sugar from less developed countries are also set to increase, putting more pressure on the EU sugar balance sheet.

Quota needs to be renounced voluntarily

The commission has therefore announced that it needs another 1.16m tonnes of sugar to come out of production by 2010.

“It will be up to the companies to decide either to renounce the quantity before 31 March 2008 under the generous conditions for 2008/09, or to renounce them next year under less attractive conditions, or to take the risk of a final cut with no compensation,” said a statement.

To encourage sugar companies to surrender more quota voluntarily, the commission this week produced figures showing how much they would lose in 2010 if no more quota was renounced voluntarily.

Romania and Bulgaria worst affected

For each country it would depend on how much quota they had already surrendered.

Worst affected would be Romania with 11.7% cuts, uncompensated, followed by Bulgaria with 11%.

Following British Sugar’s recent decision to surrender 165,000t (13.5%) under this year’s restructuring scheme, British growers could still be hit with a further 9.5% cut in 2010.

Compulsory cuts in 2010 would be smaller

But an NFU spokesman said in reality it was likely to be less. Even if British Sugar took no further part in the voluntary restructuring scheme – and its intentions are far from clear – then, so long as other member states gave up more quota, the compulsory cuts in 2010 would be smaller.

“The figures the commission has issued are not set in stone, they are really just a warning,” he said.

Meanwhile EU agriculture commissioner Mariann Fischer Boel has decided that there is no need for any further “withdrawal” of sugar quota for 2008/09, due to the success of this year’s first round of restructuring.

She will, however, review the situation in October.

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