EU ministers reconvene to thrash out sugar regime deal

A stronger restructuring scheme and increased compensation to growers in some member states have been put on the table in Brussels as EU agriculture ministers home in on a deal to reform the sugar sector.


Following a day and a night of face-to-face meetings between the commission, the UK presidency and each member state, a new compromise finally emerged on Thursday morning (24 November).


Crucially, the price cut for raw sugar is being retained at 39% phased-in over four years.


“Many of you have indicated that, with further adjustment assistance, you could live with a price reduction of 35%,” council president Margaret Beckett told her fellow ministers.


“But there are those among you who feel that a minimum counterpart for this assistance should be that we stick to a 39% price cut.”


To try and appease those member states who continue to resist the reform, the new compromise offers additional compensation to growers in those countries which surrender over half their sugar quota.


These producers would get the basic 60% compensation, available to all sugar beet growers as a decoupled payment.


But they would also be entitled to an additional 30%, which would be coupled to production and funded by the EU.


And on top of that, national governments would be able to pay the remaining 10% to bring compensation up to 100%.


The new compromise also offers a stronger restructuring package, to encourage factory closures in less efficient countries.


The levy on continuing processors is raised to generate more funds for outgoers.


Those countries shutting down over 50% of their production would get more money to pay for diversification projects or as compensation to farmers hit by closures.


The new compromise also strengthens the intervention safety net.


This was initially proposed at 75% of the sugar price, subject to a maximum annual intake of 400,000t. It has now been raised to 80% for up to 600,000t.


Other parts of the proposed package remain unchanged. The minimum beet price is still phased to drop from €43.6/t (£30) currently to €25.1/t (£17) by 2009.


EU agriculture ministers reconvened to discuss the latest compromise at lunchtime on Thursday (24 November). Discussions were expected to focus primarily on the 39% price cut.


“We’re aiming to get an agreement today,” said a UK spokeswoman. “But today lasts until midnight,” she warned.