EU agrees temporary sugar beet quota cut

Sugar beet growers in the UK are facing a quota cut of 11.7% as the EU seeks to contain production.

The cut was agreed by EU member states meeting in Brussels on Thursday (Feb2).

Overall the EU is looking to reduce total production in 21 sugar producing countries by 2.45m tonnes to 15.495m tonnes.

That is equivalent to a cut of 13.6%.

But a lower cut was agreed for the UK, and many other countries, to allow for the fact that it has a smaller B quota and therefore contributes less to export surpluses.

France, in contrast, is looking at a 16.1% cut, due to its above average level of B sugar.

UK growers may also delay the cut in contracted tonnage until the 2007/08 season under the special deal reached between British Sugar and the NFU.

Most growers are expected to do this, though some have said they would prefer to take it this season.

The reason behind the cut is that the EU has to greatly reduce the amount of sugar it exports to the world market with the use of export subsidies, following a WTO ruling last year.

It aims to achieve this through the voluntary restructuring scheme agreed as part of last year’s sugar reform agreement.

But this will not deliver the required reduction for a least a couple of years, hence the compulsory, though temporary, cut now.

“This one-off reduction is necessary to ensure that the newly-reformed sugar regime gets underway without heavy surpluses undermining market balance,” said a commission statement.

Any member states that do close factories and surrender quota this season will have that offset against the quota cut just agreed.