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Controversial sugar regime reform decision postponed

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Published 25 April 2001, updated 29 January 2010

EU farm ministers postpone decision on reform of sugar regime until their next meeting in mid-May

EU Member States are still deeply divided over the Commission's latest proposal to extend the current regime with a clause calling for a review in 2002/2003. The proposal would also allow for cuts in production quotas and the abolition of aid for storing sugar.

 

Positions: 
The failure to reach an agreement is a major blow for industrial users of sugar, who argue that the current system of subsidies keeps prices in the EU at levels three to four times higher than on the world market.

Member States are divided over whether to keep current production quotas, storage aids and export refunds until 2006 or to completely revamp the system.

Germany indicated that it could support the Commission's sugar proposal; there are still 10 Member States that would like to see the present sugar system in place as it is until 2006. Britain, Sweden, Denmark and the Netherlands support a major reform of the sugar system.

Those that support the current EU sugar regime secretly want to maintain the sugar system because any reform would mean the EU sugar market would have to compete with cheaper Latin American exporters.

 

Next steps: 

EU farm ministers will meet again on 22 and 23 May to discuss EU's sugar system. The present regime legally expires at the end of June. Agriculture Commissioner Fischler will insist that Member States agree to include the sugar sector in next year's broad review of the CAP.

Background: 
EU farm ministers on 24 April postponed a decision on reform of the bloc's sugar regime until their next meeting on 22-23 May. The decision was postponed after ministers failed to reach an agreement on the reform of the heavily subsidised sugar industry.

 

Currently, sugar is the most regulated farm sector in the EU. The sugar regime is built around a system of quotas, guaranteed prices and import restrictions. Council Regulation (EC) No 2038 outlines the common organisation of the markets in the sugar sector, adopted on 13 September 1999.

 

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