ACP joins EU farmers in appeal to maintain sugar production quotas
06 August 2012
In a statement at the joint ACP–EU Council meeting in Vanuatu on 14 June 2012, the Mauritian ambassador to the EU expressed the ACP group’s dismay at EC proposals to dismantle sugar production quotas in 2015, arguing that this would deprive the EC of ‘essential market management tools’, and would result in instability in EU sugar markets. According to a recent study by Landell Mills, ‘the absence of EU sugar quotas would cost ACP/LDC sugar suppliers up to €850 million in lost revenue up to 2020, which would ‘lead to the death of the sugar sector’ in certain ACP countries. The growing call for an extension of production quotas until 2015 was stressed by the ACP representative.
Coinciding with the ACP call, representatives of EU farmers’ and cooperatives’ organisation Copa-Cogeca called on EU ministers to ensure an extension of production quotas until 2020 to ensure ‘a stable market organisation’ while EU producers enhanced their competitiveness (through achieving higher yields of up to 20 tonnes of sugar per hectare in the best beet-producing regions). This was in line with earlier Copa-Cogeca positions on the sugar reform process.
The problems in implementing sugar assistance measures in ACP countries were also highlighted by ACP representatives at the joint Ministerial meeting.
ACP concerns were reflected in the resolution adopted at the ACP Council which preceded the joint Ministerial meeting with the EU, which called for:
- current market management tools, including production quotas, to be maintained by the EU until 2020;
- formal consultations with the ACP on the impact of the CAP reforms;
- flexibility in implementing sugar protocol accompanying measures;
- the initiation of discussions on an integrated commodity development programme;
- a prolongation of EU support to sugar sector research programmes beyond 2013.
Press reports have highlighted divergent views between the UK and French governments over the future of sugar production quotas. The French government backs sugar beet growers in opposing quota abolition, maintaining that the system should be retained until 2020 to allow the industry to adjust. The UK government takes the view that ‘European farmers are going to have huge opportunities to feed an increasingly hungry world’, and that in this context ‘scrapping counter-productive sugar beet quotas will up production, stop shortages and bring down prices’.
The Committee of European Sugar Users supports the UK position, maintaining that ‘EU sugar users have seen an increase of 40 percent in sugar prices within the last year, leading to significant financial instability for many food manufacturers across Europe.’ The Committee also considers that postponing reform ‘is not going to help prepare EU farmers or the food sectors to adapt to future market challenges’.
Editorial comment
While ACP representatives have highlighted the threat of increased price instability on the EU market if EU sugar production quotas are abolished, the current reality is that there is already considerable variation in the prices paid by EU sugar refiners for sugar imports. It can be argued that this is distorting competition between sugar sectors in different member states, with some companies having better access to raw material supplies than others.
These internal competition factors could weigh heavily in the final deliberations of EU member states governments on the future of the EU sugar regime.
The impasse between large member states such as the UK and France on sugar reform issues would tend to favour the status quo. However, it is by no means clear what this is. In late 2011, the EC’s analysis of prospects for EU sugar markets assumed that the current sugar production quota system would lapse unless consensus could be achieved in the EU Council on its renewal and extension.
It is unclear to what extent ACP concerns will weigh in the balance of EU decision making.
